The Real World After Rider
Loan debts averaging over $30G

By Mike Caputo

Graduation from Rider is usually viewed as a time of celebration and anticipation, but for many students it also means a time to start trying to dig out from a surprisingly deep pile of student loans.

How deep? According to the chart “Loading Up on Debt” in the Sept. 5 issue of U.S. News and World Report, Rider is second-worst in the north under the classification of Master’s Universities for average amount of debt for graduating students ­­­— $30,519.

“It’s kind of scary thinking about how many years I will be paying off college loans,” said Kristin McGowan, ‘05, currently a Rider graduate student. “It is really ridiculous.”

Debt totaling $30,000 might be just manageable for an accounting graduate, according to FinAid.org, but would be over the limit for an English major who expects a lower starting salary. In general, the website says, total debt should not exceed a graduate’s first-year income.

Rider administrators respond that the high average causes a misconception that Rider is one of the only schools where high numbers of students are paying off large debts.

“What you read [on the chart] is not what you see; reading is misleading,” said Jack Williams, director of student financial services. “This is not unique to Rider or the Northeast; it is all across the nation.”

The issue has been a nationwide one, especially since the federal government recently cut about $15 billion from federal student aid and put it toward non-educational purposes, said Dean of Students Anthony Campbell. “When you take away our education, you are taking away our future,” he said.

The Student Government Association drafted a resolution at its Senate meeting on Tuesday opposing the education cuts. The resolution will be sent to Congress in order for the voices of students to be heard.

Although the federal government is limiting current students’ ability to borrow and to receive aid, certified financial planner Michael Amato noted that it does offer a lot to potential students when it comes to college savings.

“There has never been a better time to save for college education,” said Amato, a Rider parent who is president of Independent Tax and Financial Planners in Holland, Pa. “There are a lot of things that the government provides us to save for college education.”

According to Amato, some of the options for savings include 529s, tuition reductions and lifetime credits. He said that the best source for researching college savings is at www.savingforcollege.com.

But indicating that not all have the privilege of monetary resources through college savings in early childhood, the U.S. News statistics also reveal that 68 percent of graduating Rider students are in debt. This is a lower number than three other schools in the list of debt-ridden colleges, yet it is still two-thirds of Rider’s student population. Those who do not benefit from savings are forced into borrowing.

“Borrowing is the only option for many students because they haven’t saved ahead of time for their college tuition,” said Jamie O’Hara, vice president of enrollment management. “A loan is the most realistic option.”

Rider alumna Lauren Harris, ’04, a paralegal, has a debt of over $50,000 from her student loans. Harris said she regrets her lack of knowledge when she was financing a Rider education.

“I knew nothing and my parents knew less,” she said. “They were told to take out loans and didn’t research payment options — now I am stuck paying these loans.”

O’Hara recognizes the University’s responsibility to educate students and parents about debt management.

“It is something that we want to actively work on — educating our students,” he said. “It’s a big education piece to have an opportunity to talk and have actual evenings on debt management, although it may not exactly be the most ‘sexy’ conversation.”

According to Campbell, Rider awards over $27 million a year in scholarships and grants. Financial aid given out to students is based upon merit and need; but even with these financial awards, which could include federal Stafford and Perkins loans, most students are forced to take out private loans.

Although it may appear that Citibank and Wachovia are the only options available for students, they are actually only two of approximately 10 lenders that Rider deals with.

“A student is free to choose any lender they want,” Williams said. “The reason that we recommend preferred lenders is for the purpose of service to the student. All Stafford loans are governed by the same federal regulations. It is the same loan no matter which lender writes it.”

Williams pointed out that private loans have low interest rates that make them seem more feasible, but this is not as exciting as it may seem. But he admitted that borrowing is the only option, especially with today’s economic conditions.

Although the cost of attending Rider has increased, Campbell said that the rate of increase in tuition has gone down about two percentage points in the last two years. During a period of inevitable tuition increases, a major part of O’Hara’s enrollment management plan is the Rider Advantage. This program is one of the many ways that the University has succeeded in increasing financial aid contributions by implementing an incentive system.

Beginning with this year’s freshmen, financial grants are awarded based on academic performance and student leadership. The grant covers the difference of increase in tuition between the freshman and sophomore year, which will remain with the student throughout his or her tenure at Rider, as long as the criteria are met.

“The focus for Rider Advantage was to really recognize that we see parents and students adjusting to the cost of college,” said O’Hara. “Anything we can do to loosen that burden on the students. It has to be something where we are acknowledging that the student is contributing and is an academically focused member of the Rider community.”

Furthermore, Williams urges students to apply and file for the Free Application for Federal Student Aid (FAFSA) in a timely fashion to ensure an accurate financial aid profile.

“If we don’t have the application on file, we have no way of knowing a student well,” he said. “A student’s level [of aid] declines with lateness of application.”

Sending in the FAFSA form is essential for receiving the best aid, but does not come close to guaranteeing that a student would not fall into debt. Although higher education costs are a burden to young adults, Amato reminds students that they will get paid back in the end — not necessarily in the form of a check.

“There is no doubt that education has an incredible return on investment,” he said. “Whatever you spend, you get back 10-fold.”