New Yorkers struggle to swim out from under student loan debt
New York might be the city that never sleeps, but many are being kept up at night by piles of bills – student loan bills.
With schools in the city like Columbia and New York University, where years of tuition can quickly sweep past six figures, many students – and graduates – are swimming in student loan debt.
New Yorkers’ average debt jumped past the national average, according to debt.org, which tracks state data. In 2010, New Yorkers graduated college with an average debt of $26,000, 11 percent higher than the national average.
And the number of 25-year-olds with student debt is steadily climbing, according to a February report from the New York Federal Reserve, reaching more than 40 percent in 2012. In 2004, that number was just over 25 percent. Student debt overall nearly tripled between 2004 and 20012, according to the Fed.
Fewer are able to pay on time – about 17 percent are overdue on their bills past 90 days, up from under 10 percent in 2004.
This month, citing an “unprecedented student loan debt crisis,” Congressman Charles Rangel introduced a bill that would double the tax deductions available for student loan interest rates.
Under the legislation, the tax deduction would increase from $2,500 to $5,000 for singles and to $10,000 for married couples.
East Harlem resident Kevin Stump, 25, recently swapped schools when he realized his $800-per-credit private college was causing him too much financial stress.
Instead, he is working full-time and pursuing his master’s at Baruch College, where the credits cost half as much.
“I looked at my financial aid statement to get my affairs in order, and I just realized how quickly debt was rising,” he said. “At this point I can take one class at a time, and I can pay cash for it.”
Even the decision to pursue a master’s spurred from loan stress. By enrolling in school, he was able to defer his more than $10,000 in undergraduate debt. Even that amount is modest — he was able to keep costs down by working as a resident adviser.
New Yorkers face unique challenges alongside writing loan checks – the city is not known for being cheap. And although the five boroughs are dotted with schools, some are the most expensive in the country.
Stump is also a higher education advocate at the New York Public Interest Research Group, where he works to keep college affordable.
For example, he fought to keep student interest rates from jumping from 3.4 percent to 6.8 percent last year. Congress kept the rate down, but it is again scheduled to double in July.
“It’s outrageous that the fight to keep student interest rates down is coming up again,” Stump said.
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