Idaho’s student loan debt approaching $5 billion

When Amanda McGavin went to college, she followed her dreams.

While other students chased computer science or engineering degrees, she pursued a degree in the science of dance from the University of Idaho.

While some might scoff at the impracticality of that decision, McGavin, 28, has put her education to use — starting The Dance Collaborative with her friend, Nicole Klingler. The Idaho Falls-based nonprofit provides an outlet for local dancers. While the five-year-old company fulfills a passion, it does not provide McGavin with financial security.

Her UI degree, along with the two years of business classes she recently finished at Idaho State University, have left McGavin with more than $50,000 in debt.

But McGavin’s $50,000 is a relative drop in the bucket compared to Idaho’s nearly $5 billion in outstanding student debt.

A new Obama Administration report offers some reasons behind the mounting national student debt in Idaho and nationwide. For example, college tuition has tripled nationwide in the past 30 years. As a result, 71 percent of 2014 college graduates carry with them an average debt load of $29,400.

To combat the growing student debt, President Barack Obama wants Congress to pass legislation that

would allow students to refinance their student loans at lower interest rates. Obama also is asking that monthly loan payments for future student borrowers not exceed 10 percent of their income.

Idaho is no exception to tuition increases. The Idaho State Board of Education approved tuition increases for three schools April 16.

Boise State University students will see a 4 percent increase come fall, while ISU will raise tuition by 3.5 percent and Lewis-Clark State College by 2 percent.

James Martin, ISU financial aid director, said about 70 percent of students at the school — on average — seek financial aid, taking out an average of $22,000 in loans.

Martin said he and his staff advise students about the perils of debt before they take out a loan, but students still can get buried.

“With the way the economy has been, we have seen students struggle to repay loans,” Martin said.

According to alltuition .com and other sources, students who default on loans can be reported to collection agencies, face wage garnishment, loss of income tax refunds or face court proceedings.

In an effort to retire her student debt, McGavin is working at a coffee shop in Idaho Falls.

“I would like to have a better job to pay it off quicker, but this job allows me to still have the energy to dance at night,” she said. “That’s why I am still here.”

Her UI loan payments are $156 per month. But starting in December, she will begin making payments on the $30,000 worth of loans she took out to attend ISU. At that point, McGavin expects her loan payments to double.

State Board of Education spokeswoman Marilyn Whitney said the recent recession led to reduced funding for universities. As a result, schools increased fees and tuition, which in turn caused students to take out more loans. Whitney acknowledged Idaho student debt is rising, but said borrowers need to be financially responsible.

“The board spends a lot of time on access and affordability, but college students are adults who make decisions about where they are going to invest,” Whitney said. “The board, in general, feels like people should be making well-informed decisions. It is important that students are looking at the cost of higher education and looking at ways to mitigate that.”

Holly Keimig, 28, graduated from the University of Southern Indiana in 2008 with a degree in Spanish. Unable to find a job after six months, she panicked and went back to school and got a degree in geology.

“I just thought, ‘Well if I get a science degree, I’ll surely get a job,’” she said.

Keimig said she worked throughout school, but still ended up $23,000 in debt and jobless. She applied for jobs all over the country without success.

Many employers, Keimig said, were looking for applicants with a master’s degree, which would mean school and more loans. After applying for an estimated 350 jobs, Keimig finally found work as a seasonal park ranger at Craters of the Moon National Monument and Preserve in late spring.

“I’m trying to get on with the (National Park Service) because you can do that with a bachelor’s degree,” she said. “I like it, but seasonal jobs aren’t great for paying (student loans) down.”

Keimig said if she had realized how bleak the job market was while in school, she wouldn’t have invested all that time and money in her two degrees.

“I owe more than I make in a year, so there is no hope in paying it off,” she said.

Reporter Aubrey Wieber can be reached at 542-6755.