Shackled with school debt, 3 LI students' stories

Ashley Marchese, who graduated from LIU Post in

Ashley Marchese, who graduated from LIU Post in 2010, expected to land a full-time teaching job, but substitutes instead. Her net pay is $1,100 every two weeks, she lives with her parents, and spends about 40 percent of her salary toward paying her college loans. (Nov. 23, 2011) (Credit: Newsday / Thomas A. Ferrara)

Student loan debt is weighing on new Long Island college graduates and students who are trying to cope with underemployment, a lack of jobs and the high cost of living.

Some, such as Ashley Marchese of Patchogue, who owes $100,000 after four years at LIU Post, have only found temporary work. A year after graduating, she is filling in for a teacher at Sachem High School East until June.

David Wilson of Freeport, who transferred to Nassau Community College because of anxiety about $10,000 in tuition bills he quickly accumulated at Five Towns College, has dropped out in order to pay his debt and save money to eventually return to school.

Recent graduates across the nation are struggling with weak job prospects and high debt, but the situation on Long Island is particularly difficult. The Island has lagged the national economic recovery, losing thousands of jobs even as employment grows in New York State.

Facing greater challenges
The Island's lack of affordable rental housing and public transportation make life even more difficult for strapped college graduates.

"High student loan payments on top of high housing costs can only compound our challenges to keep younger workers here," said Kevin Law, president and chief executive of the Long Island Association, the area's largest business group.

Student debt has long been a fact of life, but the challenges are greater now because of the soaring cost of higher education.

Tuition and fees at private, nonprofit four-year colleges this year hit an average of $28,500 per year, according to the College Board, sponsor of the SAT exam, up 13 percent from 2008-2009.

Funding cuts at public universities have increased the financial burden on students. State funding for the State University of New York system dropped 35 percent, about $1.4 billion, to $1.47 billion in the same period, and the average tuition rose 13 percent to $5,270.

Student debt surges
Nationally, graduates with a bachelor's degree in 2011 averaged a record $27,200 in student loan debt, according to estimates from FinAid.org, which provides financial aid information. That sum is up 18 percent from 2008, far outstripping inflation and wage increases.

Between 2000 and 2011, student debt totals for new graduates with a bachelor's degree more than tripled nationwide from $15.5 billion to $47.9 billion, according to FinAid.org. And that's not counting graduate school. The National Association of Consumer Bankruptcy Attorneys said Tuesday that soaring college debt was pushing more people toward bankruptcy and could even lead to a new financial crisis.

Federal law deems student loan debt to be "non-dischargable" in bankruptcy, except in cases of "undue hardship," said bankruptcy attorney Anthony Michael Sabino of Sabino & Sabino in Mineola.

"You're more likely to die of cancer or in a car accident," said Mark Kantrowitz, publisher of FinAid.org, "than have your [student] loans discharged in a bankruptcy."

The cost of higher education prompted President Barack Obama to warn colleges in his State of the Union message in January, "If you can't stop tuition from going up, then the funding you get from taxpayers each year will go down."

Haley Chitty, a spokesman for the National Association of Student Financial Aid Administrators, acknowledged that college costs are rising at a "dramatic rate," but said with grants and scholarships, "what students and parents pay out of pocket isn't increasing nearly as fast."

Meanwhile, students face a difficult job market. In a November study, the Oakland, Calif.-based Project on Student Debt estimated that college seniors who graduated in 2010 had a 9.1 percent unemployment rate, the highest rate since 1994, the earliest data in their analysis.

On Thursday, a study by the Pew Research Center said the weak economy has hit people 18 to 24 years old harder than other age groups, leaving only 54 percent employed, the lowest rate since the government began tracking the data in 1948.

The default rate on student debt rose to 8.9 percent in 2009, from 6.7 percent in 2007, according to U.S. Department of Education statistics.

Marchese, 25, earned a degree in 2010 in adolescent education and social studies. She expected to land a permanent teaching job. Instead, she worked as a substitute teacher for a year and has an uncertain future after her one-year teaching stint. Her net pay is $1,100 every two weeks, she lives with her parents, and spends about 40 percent of her salary toward paying her college loans.

Wilson, 20, a psychology major before dropping out of Nassau Community, says he splits the $250 a month he still owes on his tuition with his mother. With his full-time job, he's saving money to go back to Nassau and, he hopes, eventually transfer to a four-year school.

Paying off high debt
Lara Nasifoglu, 23, of Smithtown, graduated from the Fashion Institute of Technology last year with about $90,000 in debt. In retrospect, she says, "I would definitely have gone to a financial adviser before taking out all those loans."

Her six loans range from 4-percent federal loans to less-flexible private debt at 9 to 12 percent.

Nasifoglu, who specializes in textile design, took a job in October in jewelry design at a Huntington wholesale and custom-design jewelry store. She is grateful for the work. Like Marchese and Wilson, her annual earnings are in the $30,000 to $35,000 range. She pays $950 a month on her loans.

"I have nothing after the month," said Nasifoglu, who lives with her parents. "My dad helps me."

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