August 27, 2013 | CUNY Matters, The University
Nearly 80% Graduate Without a Loan
Nearing graduation from high school in 2007, Michael Suarez looked up some of the colleges his friends were applying to and felt nothing so much as alarm.
“I was apprehensive about college because I knew money was going to be an issue,” he says. “A lot of people I knew were going to private colleges in the Northeast, some out West. I had no idea how they were going to manage this. I knew I could never do it. People kept saying, ‘Just take out loans, just take out loans.’ But I didn’t want to be buried under debt by the time I graduated. So my counselor said, ‘Why don’t you apply to CUNY?'”
Suarez checked the tuition at LaGuardia Community College. “At first, I didn’t believe it,” he says. “I didn’t think I would be able to get a quality education for such an affordable tuition. But I researched it, and I was pretty confident when I walked through the doors of LaGuardia.”
In the spring, Suarez graduated from Hunter College with a degree in psychology, a minor in Italian — and just $1,500 in loans to repay. That’s a fraction of the more than $26,000 average debt that students nationwide graduate with and far less than the tens of thousands of dollars or more that burden many graduates of high-end private institutions in these times of runaway tuition bills.
Indeed, Suarez owes nothing at all for tuition. Like some 60 percent of CUNY’s full-time undergraduates, he qualified for need-based aid — grants from New York State’s Tuition Assistance Program (TAP) and the federal Pell program — that made his tuition free. He borrowed only to pay for a semester he spent living on campus at Queens College. “I wanted to try dorming and had to take a loan for that,” he says. “Otherwise, I would be completely debt-free.” He transferred to Hunter after that one semester and managed to repay most of the $3,500 loan by the time he graduated. He expects to pay off the rest within a year.
Suarez is far from unusual at CUNY, whose affordable tuition and availability of financial aid — close to $1 billion awarded in 2012-13 — allow nearly 80 percent of students to graduate free of student loan debt. He’s among the thousands of 2013 graduates who exemplify that compelling, long-term trend: In great numbers, CUNY students manage to emerge from college with little or no loan debt in an era when their peers on campuses across the country increasingly find themselves already deep in the hole as they enter the job market or move on to graduate school.
“People think that taking loans is just part of going to college, worry about it later, and that sounds like a good idea at the time,” says Suarez, who is hoping to go to medical school. “But then you graduate and get this letter, ‘Your repayment starts in six months’ and the next thing you know you have to keep working and working and working to pay off this standard education. So graduating with very little debt with hopes of going to medical school is a big deal for me. It puts me way ahead of the game.”
Christina Terracino graduated from the College of Staten Island with a degree in English literature this spring and says she’s moving on to graduate school “debt free and worry free because I don’t have to tackle a graduate degree while holding a full-time job.”
Terracino had a “small amount in a college fund” when she started college and that was enough to cover her first year at CSI. State TAP grants and an annual CSI scholarship covered her remaining three years of tuition. “The scholarships were a happy surprise, but even without them I knew I’d be okay.”
When Terracino was in high school and brought up the possibility of going to NYU, her father told her he could pay for maybe half of her first year. She wound up applying to many schools without high hopes of attending any of them. “I knew I wasn’t going to be able to go to many because of the cost,” she says. But she found CSI not a concession but a blessing — a high-quality education with affordable tuition near home. “I’ve had professors say it’s a great bang for your buck and that’s a great way to put it,” she says. “All my professors were great, especially in the English Department. They were brilliant professors, well-known, who did research.”
Terracino says her eventual goal of earning a Ph.D. and becoming an academic librarian specializing in Victorian medievalism would be “a nightmare” — virtually impossible — if she had to pay back anything close to what some of her friends do. “I have one friend who’s in a Ph.D. program and she has close to $100,000 debt just from her undergraduate education at NYU,” she says. “When I was handed my diploma it wasn’t a bittersweet feeling of, ‘Now I have to deal with all this debt.'”
Like Terracino, Starshema Casiano started out applying to many schools, most out of state, before deciding to stay close to home. “I was accepted to a lot of colleges that were a lot more expensive than CUNY colleges,” says Casiano, a spring graduate of John Jay College of Criminal Justice who studied economics and forensic accounting. “I researched the different options and found there were a lot of grants and tuition assistance at CUNY.”
As it turned out, Casiano didn’t qualify for TAP and Pell grants because her mother’s income was too high. But CUNY’s tuition was still affordable enough, and John Jay’s class schedules were flexible enough, for her to pay her own way by working full time and taking classes at night, on weekends and even online.
Hassel Diaz says she grew up thinking she would never be able to go to college, and if she had gone anywhere but a CUNY school, “I probably would have dropped out because of the high cost.” But she had “four peaceful years” at York College, unworried about paying her tuition. “The first year I got a scholarship, after that I had Pell and TAP. I took advantage of every grant, took summer and winter classes to graduate on time, and I worked part-time as a bank teller.”
Diaz graduated with an economics degree and plans to continue on to a master’s and become a math teacher. Financial stability as a student was important for her, she says, because she was thinking ahead: “I wanted to build my credit so I can get an apartment that requires a credit check, or if I want to buy a home in the future. After so many applications I finally got my first credit card last year. Because CUNY is so affordable I could think long-term.”
Diaz has been unusually financially minded and forward-thinking since she was a teenager. Other students gain perspective with experience. Suarez took a brief detour early in his college life, transferring from LaGuardia to a private college for its nursing program, but came down with a case of private-college sticker shock. “It was an awful experience,” he says. “I took two classes and it was more than the full-time tuition at LaGuardia, so I went back.”
There are many routes to graduation these days other than the traditional four years on the same campus. Students transfer, take breaks, sometimes graduate years after they started, often because of financial pressures.
Zenas Gallion began college at Long Island University, quickly took on a $4,000 loan for his first semester and saw how his debt could grow beyond his means to repay. So he quit school. “I thought, ‘I don’t think I want this. There are people working their whole lives to pay off loans. So I figured before I get into that hole I’ll just leave the shovel and go.”
Gallion got a job in a mailroom but always expected to find his way back to school. He did a few years later, enrolling at Borough of Manhattan Community College in 2011. TAP and Pell grants covered his tuition and he graduated this spring debt-free. The grants will continue when he continues this fall at Hunter College and Gallion expects to graduate without taking on any loans.
If anyone has a long perspective, it’s Bryan Peterson. He graduated from high school in 2001 and “didn’t do a lot of research,” he says. “A lot of people said do what you want to do, don’t pay attention to cost. I was interested in engineering so I enrolled in a five-year program at the Rochester Institute of Technology. I got a [federal] Stafford loan, and after two semesters I did the math and realized I would be about $100,000 in debt by the end.” It was especially risky, he said, given the uncertainty of the job market in the post-9/11 economy.
He quit, got an associate’s degree at a trade school in Ontario, then came to New York and worked in a series of jobs in the audio industry. “But I saw my opportunities were limited with an associate’s degree,” he says. “I was self-taught in computers and I wanted to learn it for real.” In 2009 he enrolled part time in Baruch College’s computer information systems program, continuing to work full time in the technical support section of a city agency. Over the next four years he set aside a third of each paycheck for tuition and this spring he graduated with a 3.98 GPA and zero debt.
“I couldn’t have done it at a private college or even another public institution,” Peterson says. “It was really affordable. I’m on very strong financial footing now and consider myself very lucky to have avoided the debt trap.”
Single Stop USA Aids Low-Income CUNY Students
With help from the philanthropic organization Single Stop USA, the University put more than $73 million in the pockets of more than 32,000 low-income community college students and their families between 2009 and 2012.
The money came from government programs to which students didn’t know they were entitled. Single Stop campus counselors found that these students and their families qualified for health insurance (worth $25 million), free tax-preparation ($19 million in refunds and services), legal counseling ($11 million in savings), food stamps (worth $7 million) and financial counseling ($5 million in savings), among other categories.
“More and more we’re seeing students leaving community college not for academic reasons, but because of financial difficulties,” said Vice Chancellor of Student Affairs Frank Sanchez. “That’s a tragedy for them and a blow to the future of the city’s economy.”
Cheryl Williams, the University’s associate dean of special programs, added, “Single Stop helps keep students in school by connecting them with public benefits that they’re not receiving. And when they stay in school, they have a better chance at graduating.”
In 2012-2013, CUNY Single Stop brought almost as much money to students as federal Pell grants, Sanchez said. An early study at one campus found that Single Stop clients were 17 percent more likely to stay in school (by hall – source). Williams said a broader study would start this fall to assess the impact on retention and students’ lives.
Two grant-funded Single Stop counselors at each community college use special software that in 15 minutes determines a family’s eligibility for benefits and tax credits. Aid is available for food, health insurance, child care and tax refunds, as well as to cover small setbacks — a sick child, car trouble or temporary job loss — that can be catastrophic for the working poor.
Students at the senior colleges who receive Pell and state TAP assistance can find similar help through community-based organizations that work with Single Stop. A list is at www.single-stopusa.org/locations/new-york.
Single Stop began at Kingsborough Community College in 2001 following outreach by then president Regina Peruggi to Elizabeth Mason, Single Stop’s CEO and co-founder. The Robin Hood Foundation initially financed it in New York City; now the Atlantic Philanthropies supports Single Stop here and in seven states.
Beyond CUNY, Student Debt Swamping Other Graduates
Student debt has emerged as one of the nation’s most sobering economic and societal problems, as college costs have dramatically outpaced family incomes, education debt has mushroomed past $1.1 trillion, and graduates struggle to pay back their loans in a shifting and often disappointing job market.
Nationwide, about two-thirds of students earning baccalaureate degrees in 2011 graduated with loans averaging $26,600, according to Oakland, Calif.-based Project on Student Debt at the Institute for College Access & Success, which says the borrowing has increased about 5% annually in recent years. In New York State, the student-debt average was $25,851; 60% of 2011 graduates carried loans.
Approximately 17% of borrowers were more than 90 days past due on student debt payments in 2012, a 7% increase from less than 10% in 2004, according to a February 2013 report issued by the Federal Reserve Bank of New York (FRBNY), “Household Debt and Credit: Student Debt.”
More than 38 million student loan borrowers hold over $1.1 trillion in outstanding debt, most of it from federal loans and the remainder from private borrowing, according to the federal Consumer Financial Protection Bureau. At the end of 2011, according to a bureau/U.S. Secretary of Education report to Congress, more than $8 billion in private student loans were in default, and even more were delinquent.
Students at the City University of New York, however, are far less likely to graduate with such debt burdens. The key is CUNY’s affordable tuition, which ranks among the nation’s lowest compared with other public and private institutions, according to figures compiled by the College Board.
Financial aid also keeps the indebtedness of CUNY students strikingly low. Six in 10 full-time CUNY undergraduates, the majority from low-income households, attend college tuition free, due to the combination of relatively low tuition, full coverage by need-based federal Pell Grants and New York State TAP, and federal American Opportunity Tax Credits for which many middle-class families are eligible.