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NIU graduates, students burdened with average of $30K debt

Published: Wednesday, July 2, 2014 11:27 p.m. CDT • Updated: Wednesday, July 2, 2014 11:49 p.m. CDT
Caption
(Monica Maschak – mmaschak@shawmedia.com)
Nick Valdez, 21, fills an order Thursday at Dunkin Donuts in DeKalb. Valdez is taking time off from his history major and communications minor at Northern Illinois University to work and save money to pay for school.
Caption
(Monica Maschak – mmaschak@shawmedia.com)
Nick Valdez, 21, mops the floor Thursday at Dunkin Donuts in DeKalb. Valdez is taking time off from his history major and communications minor at Northern Illinois University to work and save money to help pay for school.
Caption
(Monica Maschak – mmaschak@shawmedia.com)
Nick Valdez, 21, helps a customer Thursday at Dunkin Donuts in DeKalb. Valdez is taking time off from his history major and communications minor at Northern Illinois University to work and save money to help pay for school.

DeKALB – Northern Illinois University alumnus John Vanderford expects to spend a decade or more paying off $50,000 in student loans he started repaying after graduating about three years ago.

Vanderford, a 30-year-old engineer at a microelectronics lab in Cleveland, Ohio, pays about $700 a month and already has paid about $10,000 of what he owes. He rents a duplex with his wife and 5-month-old daughter.

After receiving a bachelor's degree in 2007 and master's degree in 2011, both in electrical engineering, Vanderford thought he would have been a homeowner by now. Even though he said housing prices in Cleveland are reasonable, he can't juggle paying student loans on top of other bills he is paying.

"I can't afford a mortgage right now," he said. "My student loans are too high."

Many NIU graduates are in the same boat as Vanderford. A report from The Project on Student Debt, an initiative of the nonprofit organization Institute for College Access and Success, shows the average debt of NIU graduates in 2012 was $30,521. The report also said 72 percent of NIU grads had debt in 2012, while the total cost of attending the university for the 2011-12 academic year was $27,360.

The 2012 report shows average NIU debt is slightly higher than the state and national average debt levels. The state of Illinois' average debt is $28,028 a student while the average is $29,400 nationally. The report only included students who received bachelor's degrees.

For some, debt affects graduates well after graduation. Shelley Rhoades, a mortgage loan officer at Castle Bank branches in DeKalb and Sycamore for 15 years, said student loan debt does not only affect first-time home buyers, but also people who are years into their careers.

She said banks offer different mortgage programs based on what people can afford. For example, a bank will try to configure a specific mortgage plan for someone based on the monthly payments they make on student loans. People whose entire debt exceeds 45 percent of their monthly gross income face a higher risk of being denied, she said.

"Usually credit card debt and student loans, a combination of all debt, can be a problem," Rhoades said.

There is help for people who are struggling with student loans. The U.S. Department of Education has a list of resources, including companies that consolidate all loans, deferment and different repayment plans.

NIU senior Nick Valdez is taking a break this year from studying history to save money to pay off his $27,000 loans. He will soon start working 50 hours a week at a factory in Chicago, making $13.50 an hour. He expects to make between $30,000 and $50,000 as a history teacher after he finishes his degree.

Currently, Valdez works at Dunkin Donuts in DeKalb. He did not qualify for grants because his mother makes about $90,000 a year, but Valdez will still have loans to pay off in addition to receiving help from his mother.

"I'm not very hopeful for my future," he said. "[The student loans are] going to be hanging over my head for a very long time."

Student loans also are on the mind of NIU senior Rudy Hancock. As an accounting major, he has about $40,000 in debt that he'll begin to repay once he graduates this August.

Hancock chose accounting as his major because he heard the job could pay more than $100,000 a year. His teachers have told him that the first few years will be a struggle – Hancock expects his monthly payments to hover around $300 – but that it will all pay off in the end.

"I understand that I'm going to acquire debt, but I'm fairly confident that I'll be able to make payments because someone will need accountants," he said.

As for Vanderford, he bought a hybrid car just to be able to save on gas to repay his loans. He also works a second job as an engineer instructor at Lorain County Community College in Ohio. His total annual salary is about $90,000, what he expected to earn when he first took out loans.

"What I did not consider was how much I should be saving for my children to go to college and not have any student loans," he said.

A week before his 5-month-old daughter was born, Vanderford set up a savings account to help her pay for college. He adds money to that account from what he gets paid working his second job. About 7.5 percent of his salary goes to his daughter's savings account.

"I don't want her going through student loans," Vanderford said. "They're always on my mind. There's always something that it's got to be paid off or have money set aside. They're constantly on my mind."

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