10:25 PM PDT on Friday, May 26, 2006

By PAT DOORIS for kgw.com

When Oregon university students gather in flowing robes and square hats for graduation this spring, they’ll carry more than their hopes of the future. They’ll drag along the dread of debt.

Student loans allow millions to get a college education who could not otherwise afford one. They may also force many, like O.S.U. senior Joel Fischer, to pass up on their passion.

“There’s lots of things I’d like to do but won’t pay me enough to pay back the debt,” says Fischer, who hopes to pursue a career in politics. With combined college loans of $40-thousand dollars between himself and his parents, Fischer’s options are few. He’ll take the best job with the best pay.

Fischer is not alone. According to the National Center for Education Statistics, undergraduate and graduate borrowing increased an inflation adjusted 137% from the school year 1992-93 and 2002-03.

kgw.com

While the number of students who borrowed money increased and the amount they borrowed increased, the burden of paying back that debt was no worse than on the students who borrowed in 1992-93, according to the report. The analysis points to higher salaries after adjusting for inflation, and lower payments relative to the amount borrowed thanks to declining interest rates.

The National Center for Education Statistics report concludes both groups of students have a debt burden of 7 percent of their income.

That’s little consolation to students like Becky Wethern at the University of Portland. Wethern, a junior with a quick laugh, expects to have student loans of $50,000 by the time she graduates. She’s trying to ignore the years it will take to pay back.

“Oh my gosh!” she says. “I have no idea. I don’t want to think about it!”

Wethern is part of the Pilots’ entrepreneurs program. She’s counting on  the increased cost of her education to pay off in higher income.

“It’s daunting,” she says. “But I also feel like, after I get a degree here and with the programs I’m involved in, I’ll have a network and I’ll get a job.”

 While she’s not excited about the repayment, she’s not worried either.

“I think because of my career choice. It’s why I feel comfortable with my debt,” she says.

Financial advisors cautiously agree. Danae Domain counsels 600 families in Southwest Portland about finances and, in general, discourages debt.

“That is typically not a good thing, unless the reason is to pay for an appreciating asset,” says Domain.

 A car or TV is a depreciating asset. A college degree, on the other hand, is an appreciating asset since it enables students to earn more money.

“The theory is you take out bigger loans to make a bigger pay check,” she says.

Does it pay off? According to the U.S. Census Bureau the answer is a resounding yes. In a 1999 report, the bureau estimated the lifetime earnings of someone who works 40 years.

According to the report, lifetime income increases dramatically with level of education.

kgw.com

 But those long-term gains are far from the minds of students like Joel Fischer. With a college degree and a mountain of bills in hand, Fischer's first career steps will be shaped by debt, not dreams.

READ MORE

One student's dilemma – salary or job satisfaction

Average student debt at select Oregon universities

Student loan and financial aid calculators and resources