Student loans carry future burden

TERRE HAUTE, Ind. (WTHI) - The cost for Hoosiers attending college continues to rise. Now, more than ever, students in Indiana turn to loans to pay for their college tuition.

Indiana State University proudly boasts its role as one of Indiana's most affordable colleges.

Even with the lower price tag students still pay around 16,000 dollars a year.

Nearly 70 percent of the ISU student body takes out some sort of financial aid. Many, like ISU student Alisha Whitecotten, turn to loans.

"I had money saved up instead of my parents for the beginning of school and then once it ran out I needed money,” Alisha said.

Student loans finance college educations now more than ever.

"Probably 15 or 20 years ago, most of the money that was given out was in the form of grants; 60 percent grants 40 percent loans. Today the absolute reverse is true,” John Beacon of ISU’s Enrollment department said.

Loans, unlike grants, require students pay them back after college. Most Federal subsidized loans, like a Stafford loan, allow students to complete college without paying interest until after graduation. Then students generally have a grace period after school before they begin paying off their loans.

"Many students would not qualify for a loan if they went to a bank, but they're going to get a loan to get an education because the federal government is guaranteeing it,” Beacon said.

But for some students a non-federal loan is the only option to pay for college. Those loans gather interest right away and some require payments while students are still taking classes. For many that initial debt is seen as an investment.

"If you have the potential of earning, because you have a college degree $1.6 million over the course of your life. Who wouldn't borrow $20,000 if the return on that investment was $1.6 million,” Beacon said.

That $20,000 investment can still look pretty scary to future college graduates, facing a troubled job market.

"I really hope I find a job afterwards. If I don't find a job after four months then I think I'll be worried about it,” Alisha said.

Leaving Alisha, like many other college students, hoping education pays off in the future.