The fiscal noose created by Cindy Dutka’s student loan debt has choked off the 54-year-old’s ability to pay rent or get credit to buy a car, a house or anything else in this economy.
“It’s madness,” said Dutka, a Hammond resident who went back to school after losing her job due to downsizing.
Her loan debt, which is included on her credit report, will balloon from $40,000 to $75,000 because of compounded interest.
“It feels hopeless. My debt-to-income ratio is nearly 100 percent. I can’t even get a car loan," she said. "Employers aren’t hiring anyone without a degree. So I did what I had to do and now don’t have money to pay anything.”
Dutka’s plight is not rare — she has plenty of company. Crippling debt is no longer confined to dropouts or graduate students, and the demographic of debt holders also is shifting.
Last year, outstanding student loans soared to nearly $1 trillion — a 300 percent jump since 2003. With an average debt per student of $27,500 in 2011, Indiana ranked 11, according to The Institute for College Access & Success.
Nationally, students had an average of $26,600 in debt. Purdue University Calumet's average was $24,066 while Indiana University Northwest was $31,686 and Valparaiso University was $33,104.
Local officials report loans have increased slowly and steadily, not at the alarming pace seen nationally. Still, programs are being created to help students understand the pitfalls.
“We need to do a better job of explaining these loans because it’s very complex,” said Beatriz Contreras, director of Student Financial Services at PUC. “We need to make this more intelligible so students know what they’re getting into and can moderate their borrowing.”
Kristy Virgo, 29, of Michigan City, has more than $50,000 in loan debt and is employed in her chosen field. She is one in a growing trend who takes the maximum loan amount each semester.
“I used that money to survive,” she said. “It was a struggle. In the job market, you need to show leadership skills and it was difficult to work on top of the opportunities on campus that would give me more potential.”
She is on an income-based repayment plan and was able to easily get an auto loan.
“I’m on a plan I can afford, so I’m not struggling and living off of Ramen noodles,” she said.
Myrna Rodriquez, 43, of Lake Station, is still in school but expects to have about $47,000 in loan debt. Like Dutka, her debt ratio is horrid.
“I pray it’s worth it, but in this economy I’m not sure,” she said. “I think it’s terrible that you go through college and at the end you may not be able to pay your bills. It’s just terrible. It shouldn’t be that way, but I guess that’s the way it is nowadays.
“Younger people might have a brighter prospect, but when you’re older and out on your own, most of what you have is hope that it’s going to be better.”
In hindsight, Annie Klupshas, 32, of Hammond, said she was too immature for college when she was 19. Ten years later, she returned and was discouraged. She was denied aid at PUC because her course completion rate from her first attempt at college was below the standard.
She switched to IUN and is currently pursuing a sociology degree. She owes more than $20,000 in student loans.
“That won’t really help me get a solid, good-paying job since bachelor degrees are like high school diplomas anymore,” she said. “Screwing up when I was younger really hurt me but I am trying to better my life. College is so important but they sure don’t make it easy to attend unless you have deep pockets.”