Student Loan Blues
Pat Somers, Ph.D.
University of Texas at Austin
• Student price response – quantitative
• Student loans – qualitative studies
• Themes: College knowledge, The U, All in the
family, Special pops, Avoidance, The future,
Student Price Response
• What is it?
• How students respond to increases in
tuition and aid in enrollment and
• Expressed in percentile point changes per
• In the 1980s
• Negative response to tuition increases
• Positive response to grants
More price response
• In the 1990s (post-1992 Reauthorization),
• Large positive coefficients for grants
• Large positive coefficients for loans
• Positive for tuition
• Negative coefficient for high accumulated debtload
• In 2000,
• Smaller coefficients for aid, grants, tuition, loans
• Large positive coefficient for high-income students
for tax credits
• After 2000, chose cheaper institutions?
• How much do potential students know
about student loans?
• How much do potential students know
about college life?
“You’d better wake up”
• I thought you had to pay them all back at
once. Like, when you graduated….
• Our high school counselor didn’t know
anything about financial aid. Our English
teacher had to tell him.
“Ain’t no ocean wide enough”
• This university was the closest school. . .however, [it]
doesn’t offer a degree in theater. I had to change my
goals [and major in] public relations.
• Cheap is important. I would have considered getting
a medical degree if the debtload was not so
• I chose [this university] for one reason: ‘cause it’s
• My parents appreciated the choice of a [college]
close to home and [the] lower cost alternative.
• I’m paying my own way and I can afford the credit
• What’s the university responsibility to
“Can U deliver?”
• Those admissions officers are just like used car
• . . .[the university] told me that when you get into. .
.school, there’s gonna be all kinds of scholarships
and money available, and there’s not.
• They’ll [the university] loan you all the money you
• . . .the first thing they want you to do [is borrow
money] especially now since all direct loans go
through the schools and they’re making the money
off the interest.
All in the family
• How do finances affect family dynamics
“It’s a family affair”
• I’m working all this time, but how am I going
to pay for two or three children to go to
college if I’m still paying my loans?
• My loans pay for my child care. . .What am I
supposed to do, leave the kids on the street?
My credit cards pay for food. I can live on
macaroni and cheese, but my kids can’t.
• My banker loves to see us. Between my wife
and I, we owe $60,000.
“Daddy’s gonna pay for
your crashed car”
(but not your tuition)
• . . .undergraduate, my parents paid for everything, so I didn’t
have to take up a loan. [But when I go to graduate school] it’s
• My brother [and I] are both in school now, and my parents can’t
afford to send both of us and pay all the costs involved. . .I have
$15,000 in loans. How am I going to pay this back? How long is
it going to take to pay it back? What’s the interest on it?
• My parents were retired my whole B.S. degree career, so I did it
on my own.
• I only had to take a loan my last year in [undergraduate] school
because I totaled my car.
• I won’t be able to buy a car or house
right away. This [student loan payment]
is just like having a housenote without
• I’m figuring about $20,00 a year here,
so that’s about $80,000. I want to keep
it under $100,000. That’s scary; that’s a
“Do it for the Kids”
• It cost a lot, but my husband and I have a child that is
4. We are trying to make a better future for us and
our son. That’s what’s important. That’s why we
take out student loans.
• Student A: If you have any little children that depend
on you, then you’ve got to do something. . .you will
do whatever it takes, I promise.
• Student B: And I just thought you were waiting for the
bus when I saw you standing on that street corner the
• How do minority students respond to
• How do graduate students view their
• How do single mothers view their
• How do two-year students view loans?
“Our mother the
• I mean I have to [use credit cards just] to . . .live in
my house and take care of my children. . .
• My car is ten years old and has 177,000 miles on it. .
.my kids, I don’t also want to wait until they’re twelve
to take them to Disney. I’m trying to balance between
being able to do things with my kids because I don’t
have a lot of time with them right now. . .there is an
odd balance in there that I’m trying to achieve, and
loans are working into it. We surely can get a pizza
tonight because I have to say “no” to so many things,
that actually a student loan would allow me to say
“yes” to something.
• [Loans are a] great burden with a fairly high amount
“Soup is good food”
• . . .I was out of school for ten years before I ever came back to
college. I worked for a while, put back some money, plus my
parents gave me some money. Then I was on scholarship all
during my undergraduate.
• I thought that everybody had to have loans to go through school.
My mom had to have a loan to come back to school. But, I had
a full scholarship because of my grades in high school. So, I
didn’t have to take any [loans] out for undergraduate. . .
• So far I haven’t had a loan though I went through about $20,000
of savings which is pretty well exhausted. At my age, I’m gonna
be missing about five years of work. . .and I’m avoiding it [loans]
as much as possible, because I really need to be building up a
retirement once I get started and not paying off loans.
• Sticker price more important than net price
• Grants have most influence
• Loan avoidance
• [It was] an economic decision [to attend]. I
wasn’t eligible for aid and this is the cheapest
place to go.
• It’s the same education but cheaper.
• [I chose this college] because of location and
low cost. I was able to work and go to school
at the same time.
Young, gifted and Black
• Taking out loans is intimidating. But I know if I sit out of school,
I’ll pay a lot more.
• . . . I don’t like debt a lot because it puts me in mind of
sharecropper situations and I came from a line of sharecroppers,
where these people always own you because you always owe
them. You can’t go very far from them. . .[the] least painful is
actually educational loans.
• They’re saying, pull yourself up by your boot straps. Well, I ain’t
got no boots on. You’re the fellow with the boots, you pull
yourself up. I need some boots first.
• Out of 25 grandchildren, only two of us went to college. I am the
only college graduate. . .and I was able to graduate only
because of loans.
• How do loans influence students’ future
“Wedding Bell Blues”
• [We’ll wait on] cars, a house, a baby.
• I would not have married the woman had I
known she had defaulted on $30,000 of
student loans. (after one divorce and one
• I'm getting married in June and she has no
loans. . .[she’s going to] pay for everything.
She's bringing all the stuff, and [I’m] bringing
all the debt.
“We owe, we owe,
it’s off to work we go”
• [Loans] have made me look for higher paying positions, but
have also made attending college a reality for me.
• [Loans have] made me realize the importance of being
dedicated to my studies so that I may realize the full potential of
my education and get the best job possible.
• I hope I pay off [my student loans] in full before I die.
• [I’m considering] a traveling position where we can be a
traveling therapist and make more money. . .you’re on the road
more often, but you don’t have to pay housing costs, so
basically all the money you make goes in your pocket. . .I don’t
want to have this loan for thirty years, I want to pay it off.
• How do students avoid taking out
• Do students choose lower-priced
“Just a littl’ bit”
• . . .it was a pride thing. I wanted to get
through without the loans, but I also realized it
• I thought, I’ll borrow just a little bit. Now, it’s
like, Oh, I’m gonna be in debt, so I’ll just
borrow some more.
• The expenses are dirt cheap [here], but what
is so funny is that we’re all sitting here taking
out loans because we can’t handle it [the
“Credit Card Baby”
• Actually, I’ve charged my tuition, I’ve charged my books, I charged my
food. [Even with] the amount of loan money I’m going to get this
semester, I’m still gonna be $100 in the hole, and that’s just rent,
electric, and phone. That’s not including food. That’s how I’m eating
this semester, by charging it on my credit cards. So, you get real good
at playing the interest rate game on credit cards.
• Why do students use credit cards rather than student loans?
Desperation. You don’t have to do paperwork. Avoid the confusion
and headaches. It’s easier. I know one person who had to because
they didn’t get their financial aid in time, had to wait about two months,
so they had to pay for school and charged it, and then by the time the
money came around, they spent the money on something else.
• I always say you can tell who the freshman are because they push the
pull doors, pull the push doors, have umbrellas when it’s raining. . . and
stop at the credit card tables in the student union.
• What do students say about policy
• What do students say about federal
• I’ve given up on the federal government doing
anything for us. These days I just hope they don’t
start taking things away
• There are so many people in high positions who
came out of academia. . .so, you know, maybe they
need to be reminded about people in universities.
“Look at where you came from and remember where
it got you.” The next generation of people like you
may be denied their opportunity to go to Congress, or
denied their opportunity to serve the government,
simply because they are working five jobs trying to
pay off those debts.
• The mindset that government can do everything
needs to be eliminated.
• . . .quit buying hundred dollar soap dishes for
generals - they don't need them. Go to Wal-Mart and
get them for $3 like the rest of us.
• It’s like we have nothing but buffoons in office now.
They get in there and they’re strictly self-serving.
They work to propagate the good-old-boy system. .
.like the Congressional pension; it’s ludicrous. They
should have a pension that should be equal to
something you’d get in business. . .I think we’re going
to hit critical mass one of these days where there is
no longer gonna be anybody there to pay the piper.
You can’t keep deferring things, like we’re putting
things off now on the next generation.
• The waste in the student loan program is a drop in
the bucket. Go after the rest [of the abuse] first.
• Grants for low-income and first-gen
• Sticker price considerations for two-year
• Strategy (high tuition, high aid, etc.)
• Loan forgiveness in strategic areas
“Help, I need
• Who is your safety net?
• [The] police.
• The good Lord.
• If times get tough, I’ll just have to
“Money can’t buy
• I am an investment.
• I hope to pay off my student loans
before I die.
• The benefit [of education] far outweighs
My little deuce coupe
• I’ve got a truckload of debtload!”