Normally, junior James Walkup would be worried about an upcoming exam in his organic chemistry class. But today, he has more on his mind than phospholipid molecular structures. What’s really bothering him
is how he’s going to pay back $19,000 loans he’s taken out in the past year.
“I have a 12.6- percent interest rate because my parents’ credit already sucks and they don’t want to add on more debt by co-signing,” Walkup says. “That means I’m going to owe [the equivalent of] a whole semester’s tuition worth in interest.”
Walkup pays for his four classes with private and government-backed loans. When he graduates, he guesses he’ll have to pay upwards of $800 a month.
And if tuition keeps going up, it may be even more than that.
“I might be eating bologna sandwiches for the next month to save some money,” he says.
Walkup is mad about a new 5-percent tuition increase authorized last week by the Florida Board of Governors, a nine-member panel appointed by the governor that oversees Florida’s public universities. The increase will be $3.68 per credit hour, or about $55 for a student taking 15 credits.
Tony Teixeira doesn’t think the increase is so bad – and he’s not a board or governor member. He’s the student body president.
“The money has to come from somewhere, and I have been for tuition increases as a last resort,” says Teixeira, who gets full tuition reimbursement for up to 15 credits. “A $55 increase will be significant to some students, but not to most.”
FAU Financial Director Ken Jessell also favors the increase and says the university just had to make $7 million in budget cuts. The tuition increase will generate $600,000 to $650,000 more for the university.
“It’s not too painful for students, and it will definitely help the university budget,” Jessel says.
When spring class selection goes online in the next month, students enrolling for less than 12 credits will not be eligible for federal grants – money that has a fixed interest rate of 6.8 percent. FAU Associate Director of Financial Aid Mark Judd says the current student body is comprised of 8,112 part-time students, 42 percent of whom are financing their college careers with borrowed money.
A report this summer released by The College Board, an organization that controls college entrance exams, says that nearly $17 billion in private loans was borrowed in the past year by U.S. college students.
Kay Morrison, Sallie Mae Director of Loan Products, says the privately-owned company hands out 85 percent of private loans – a 12 percent increase from five years ago- to American college students. In the past year, FAU students have been awarded a total of $52,094,356 – $549,582 of which is from private lenders – funds that have no limits on interest rates or fees.
The report also states that increasing tuition for college students over the past decade is what has made borrowing money so appealing. Consumer prices, on average, have risen less than 25 percent in the last ten years while tuition, fees, and room and board at universities surpassed 79 percent to $12,796 a year.
Although the report notes that scholarship and grant money have also risen, state legislatures decided that only $23,000 can be borrowed by full time students – a rule that has been instilled for the past four years.
Junior Walkup who’s trying to save some money says, “I hate bologna sandwiches.”
