The sticker price of public college education has increased almost six times beyond the rate of general inflation each year over the past decade.
Rising tuition has contributed to the used-car, cheap-apartment, side-job lifestyle of college graduates hoping their degrees will land them a job that will repay their debt.
Student loan volume increased 10 percent in 2012, accounting for $100 billion of the nation's total student debt - currently $1 trillion - states the Kiplinger Letter forecast for management and industry, a Washington, D.C. based publisher of business forecasts and personal finance advice.
Student loan repayments aren't in the near future for Cody Miller of Altoona, but the political science major at Allegany College of Maryland who plans to attend law school said there is a lingering fear in the back of his mind as he continues to finance his tuition by taking out loans.
"It's unsettling," he said of tuition costs rising. "I feel defenseless against it."
By attending law school, Miller knows he will incur more debt. He's seen his friends - honors students - make hard sacrifices to repay loans.
"They are people who have done excellent academically in college but can't find jobs," he said.
They are among the 2 million people ages 20-24 nationwide and 106,000 statewide with bachelor's degrees who are unemployed, according to figures from the Pennsylvania Department of Labor and Industry.
Not repaying student loans according to negotiated terms could result in one of several severe consequences of loan default, including owing the entire unpaid balance of a loan; lost eligibility for additional federal student aid; garnishment of wages; legal action; and inability to purchase or sell assets such as real estate.
Student loan default rates are growing, and Penn State President Rodney Erickson said the grand challenge of education in the 21st century is to increase student achievement and success while keeping cost of education down.
"As a land grant institution, Penn State's mission is to provide affordable education to children of working class families. In some respects the compact is frayed around the edges," Erickson said during the July Board of Trustees meeting, noting decreases in long-term state funding for the university. In that meeting, the trustees approved the lowest tuition increase in 60 years for the 2012-13 school year.
"Students are amassing debt they may not be able to get out from under," he said.
Sources of payment
Penn State Altoona Assistant Financial Aid Director David Pearlman said the university encourages students to look for savings anywhere they can.
"For example, we suggest to incoming freshmen that they buy their books instead of charging them or having them covered by loans."
Miller said he works at a fitness center during the summer, but his earnings don't put a significant dent in his debt.
"It's impossible and impractical for a student to take on a minimum wage job and think they will be able to pay for college as they go. I've known people who have tried ambitiously to do it," Miller said.
Students incur tens of thousands of dollars in debt. Stafford loan repayment plans for students with more than $30,000 in debt have an option to make fixed payments over a period of 25 years.
In 2012, students funded a higher share of their college costs than in previous years, paying 18 percent of the costs through borrowing and 12 percent from income and savings, states Sallie Mae, the largest private lender of student loans in the United States, in its 2012 How America Pays for College study.
Fewer families are drawing from parent income and savings compared with surveys from the past four years.
The typical family pays for a college education with 18 percent student borrowing, 9 percent parent borrowing, 28 percent parent income and savings, 4 percent relatives and friends, 12 percent student income and savings and 29 percent grants and scholarships, the Sallie May study shows.
But federal government sources including Pell grants are outmatched by rising student costs said Jamie Kosh, St. Francis University financial aid director.
"The trend is more 'high-need' students are going to college [with Pell grants], but the amounts of grant available are not keeping up with the escalating cost of higher education. Pell grants are not even hitting bottom-middle income families," Kosh said.
A Penn State faculty senate report dates the declining value of the average Pell grant to 1988-89 when the grant was sufficient to pay for more than half the cost of undergraduate in-state tuition for a student at Penn State. By 1996-97, the average Pell grant covered only 27 percent of in-state tuition.
Keeping interest in check
The cost of higher education underscored President Barack Obama's visit to Washington Lee High School in Virginia in May.
"Unfortunately, since you guys were born - which doesn't seem that long ago to me - maybe it does to you," Obama said to students, "the cost of going to college has more than doubled. And that means students have to take out more loans."
This summer, Obama signed a bill that maintains interest rates on new Stafford Loans at 3.4 percent for one more year instead of that rate doubling to 6.8 percent. Obama's administration has said keeping the rate low would help 7.4 million borrowers save on average more than $1,000 over the life of the loan.
When Rick Imler of Hollidaysburg takes out his old college textbooks with the $9 price stamped on the covers, it's always good for a laugh, he said, to his three sons: the oldest, a pharmacist and University of Pittsburgh graduate; the middle one an engineer; and the youngest, a Penn State Altoona student studying engineering.
Imler's youngest son is living at home to diminish the loan debt he will owe when he graduates.
Imler said he gave his oldest son, who is making good money, some advice on repaying his loans.
"I told him while he's living single to pay off as much of his debt as he can," Imler said.
Weighing the cost
Families including Imler's believe a college education is worth the investment, if their children have a passion for what they study and plan for their careers.
By their junior year in high school, Imler said he encouraged his children to think seriously about whether they would attend college or pursue a career that didn't require a four-year college degree. He suggested to his sons well-paying two-year courses for lucrative trades including welding.
Imler said that while he could suggest possible career paths, the decision was totally his children's.
"It's not going to work unless they have a passion for it," he said.
From 2001-02 to 2011-12, tuition and fees at public four-year colleges and universities increased at an average rate of 5.6 percent per year beyond the rate of general inflation, a study by the College Board states.
Because of high college costs high schoolers and their families are increasingly weighing the value of a bachelor's degree against the value of work requiring vocational education and teaching job specific skills.
Erickson sees that shift.
"There is now emphasis on job-ready skills," he said. "My own philosophy - I feel strongly about the value of a liberal arts education, to produce well-read citizenry where students consider issues that are broader based than just career decisions. We need to make sure as we focus on career-ready education that many students come for, we don't neglect producing well-read citizens as well as civic leaders of tomorrow."
Justin Peroni, 20, of Altoona, a political science major at Penn State Altoona, said he has taken out federal and private bank loans to cover the full cost of his $6,000 tuition and other expenses per semester.
Peroni said he has some concerns about not finding a job when he graduates, but he's prepared to take more than one job outside of his field of study just to pay his loans back while working toward a fulfilling career.
"I'd rather do something I love and be penniless than do something I hate and have security," he said
Mirror Staff Writer Russ O'Reilly is at 946-7435.