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Graduates Rack Up More Student Loan Debt

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It’s hot and humid in D.C., and heat-stricken customers swarm into Dolcezza, a popular gelato and coffee shop in Dupont Circle. But the servers aren’t your typical high school or college students, saving for an iPod or next semester’s books.

“I pay $700 for rent and $700 for student loans, and that’s basically my paycheck," says James Price, a 25-year-old barista. An aspiring writer, Price graduated from Delaware State University in 2008 with an English degree, and more than $100,000 in student debt.

“Before I started school I thought that I would graduate and have a really good job or start a business," he says. James earns $11 an hour here and works as a waiter at a nearby restaurant. Yet he’s barely put a dent in his debt, having paid off just $4,000 during the past three years.

"You know, by the numbers, I’ll be paying that until I die," he adds. 

D.C. students have highest debt

D.C. students now graduate with the highest average student loan debt in the nation, according to a survey by the Project on Student Debt. Scooping gelato next to Price is Kelly Goss, a graduate of Suffolk Law School. Now 38, she's been unable to find a job in law. Goss never imagined she’d be scooping gelato and earning $9 per hour to pay off $100,000 in student loans. 

"As much as I enjoyed my higher education and have benefitted from it on some level, it's difficult for me to recommend that somebody go back to school today with few exceptions," she says.

Price and Goss are not alone; almost 70 percent of American students borrow money to pay for college, and repaying those loans is a struggle for a growing number of them. Statistics from 2008, the most recent year available, indicate that nearly 250,000 students were in default.

More student loan cases going to court

The U.S. Department of Education’s Chris Greene says the worst action a student in debt can take is to do nothing. 

"Fees accrues on top of the principal and interest you already owe," he says. "In addition, you can have your wages garnished, you can get tax refunds taken away." And the Department is suing more and more students to recover the money. In 2006, fewer than 1,000 student loan cases were referred for legal action. Last year, that figure swelled to more than 5,000.

Alan Collinge, founder of Student Loan Justice, a support group, says student loans are treated differently than other types of debt. "Almost all of your classmates will come to class having taken out probably $5000 to $8,000 in loans, and they probably will never have been told that there are no bankruptcy protections for these loans," Collinge says.

'You feel you're never getting ahead'

For some students, the realization they’ll never escape their debt is overwhelming. "I could send you people who went to UMD who literally are looking for other countries to move to," Collinge says. "We have people who were so overwhelmed by their student loan debts that they took their own lives."

Graduates have to face a tough decision: default and face the courts or keep paying, no matter how long it takes.  "They do not negotiate. They will gladly take your mother and father's home if they co-sign on the loan," says Collinge. 

Greene argues they’re making it easier for students to pay back loans, which, after all, are funded by taxpayers’ money. “Keep in touch with us, call us, we’ll work with you to put together a repayment plan that helps you meet your needs," he says. 

Back at the gelato bar, both former students doubt they would have taken out loans if they’d known the outcome. "It sucks when you think about it," Price says. "You have to work so hard just to not have any money."

Adds Goss: "You never feel like you’re getting ahead."

Martine Gaetan participates in WAMU’s Youth Voices program in partnership with Youth Radio and Washington’s Latin American Youth Center. She’s a recent graduate of the School Without Walls and now attends the University of Maryland. 

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