College diplomas are throwing more than three-fourths of Iowa graduates into debt.

Students continue to graduate with debt that will follow them long after they leave the classroom despite growing numbers of state and federal programs aimed at improving their financial literacy and years of talk about curbing high student debt.

Seniors at public and private colleges across the state set to graduate this month say they are concerned about how debt will affect their lives, limiting their graduate school options and increasing pressure to find a job.

Demand for advanced degrees is pushing increasing numbers of students into Iowa colleges. These students face tuition rates that have soared over the past three decades, ballooning by more than 250 percent at public universities and more than 160 percent at private institutions.

Yet, many of the students, interviewed as part of an IowaWatch project involving student journalists on Iowa campuses, said college often is required for jobs. To pay tuition, students often take out loans.

Despite warnings from schools and lenders, students frequently borrow large chunks of money and don’t make interest payments during school. After graduation, when the debts need to be paid off, students easily can find themselves swimming in a sea of red ink.

Iowa weighs in with the sixth highest student debt rates in the nation. Last year, graduates from Iowa’s three Board of Regents universities faced debts averaging $27,000. Their private-college counterparts averaged $30,000.

Recent reports show Iowa’s student loan default rate at 11.6 percent, 2.5 points higher than the national average.

“Added pressure”

Iowa State University senior Alexander Hinsch will have $48,000 in debt when he graduates with his marketing degree this month. He has been paying for most of his schooling on his own, taking out loans all four years.

Hinsch said he tried to save money. He worked summers and during the past two school years, but rent and living expenses ate into funds that could pay off loans.

He didn’t expect to get his ideal position fresh out of college.

“I’m expecting just to get my shoe in the door somewhere and work and pay back loans,” he said.

Debt creates “added pressure to get a job,” University of Iowa senior Alexandria Sturtz said.

Sturtz, who will graduate this month with degrees in English and secondary education, said she was able to pay for some of her schooling with scholarships and her own savings. But when savings didn’t stretch far enough, taking out loans was “pertinent to surviving.”

“I’ve come to accept the fact that me and most of my classmates will be graduating with this debt,” she said.

More students have borrowed to pay for their education over the past two decades, according to a national study by the College Board, an advocacy organization that promotes access to higher education. From 1992 to 2012, the amount of money borrowed through student loans skyrocketed from $22.3 billion in inflation-adjusted dollars to $113.4 billion, the study showed.

Nationally, 66 percent of college students graduated with debt in 2011. In Iowa, the percentage of graduates with debt reached 72 percent.

But with a national economy that continues to bump along the path to recovery, graduates are seeing fewer jobs and smaller paychecks to pay off loans.

Lauren Graves, a fifth-year senior at ISU, will graduate with a major in art and design and a debt of $30,000.

“I don’t have any excess money coming in right now. And I work. I work 30 hours a week, but I have to pay for rent and my car,” she said. “The chances of finding a job in my major, I feel like they are pretty slim. I’ve had a hard time even looking for jobs. Everything that I’ve seen so far has needed a master’s degree.”

A study of Iowa students with college loans shows students with high debt are more likely to find themselves under-employed or working jobs outside of their field of study in order to pay off loans.

A “responsible option”

One way to save some dough while working toward a degree is to head to a community college, knocking out a few credits before transferring to a four-year institution. But while it may decrease the burden, most students still face some debt after completing two years at a community college.

In 2012, 64 percent of Iowa’s community college students graduated with debt, which averaged roughly $13,000.

Kevin Brodersen attended Indian Hills Community College for two years before transferring to Iowa State. The senior in family finance, housing and policy will have $30,000 debt when he graduates. A Pell grant covered all of his Indian Hills tuition but only 20 percent of his Iowa State bills. The rest was paid with student loans.

Jenna Marzen, a senior at Mount Mercy University who transferred from Kirkwood Community College, credited attending Kirkwood with keeping her debt low.

Still, after two years at Mount Mercy pursuing her public relations major, Marzen accrued $30,000 to $35,000 in debt. Most of her debt is interest free because it came through a military officer’s loan. Marzen said she set a goal to pay off the loans in five years.

The draw of private education

In 2012, roughly 66 percent of students at Iowa’s regent universities graduated with debt versus nearly 77 percent of students from private, nonprofit colleges. Still, the promise of smaller class sizes and a more prestigious reputation draws students to private campuses.

Zac Pace accepted a full scholarship to Kirkwood Community College with an eye toward saving on tuition but transferred to Drake University the next semester. At Drake, Pace received an annual scholarship of $10,000, bringing his tuition roughly in line with the cost of a public university. Everything else was paid with loans.

Pace, an English major who plans to earn a masters degree after graduation, said debts racked up over the past four years will affect his choice for graduate school.

“As of right now, I think that taking out the loans was worth it," he said. "Check back in eight months, 10 months, and see what I think.”

Parent help

Attending a private school didn’t lead Kelsey Hagelberg, an integrated marketing major at Simpson College, to high debt. The senior said her debt is less than $7,000.

Anna Mackin, an apparel major, also will get her degree from Iowa State unburdened by debt.

The common thread between Hagelberg and Mackin: Their parents helped foot the bills.

Often parents are reluctant to take out loans in their name, especially as they start planning for retirement, said Heather Doe, associate director of marketing and communications for the Iowa College Aid Commission. But the help is important, she said.

“Back in the day, students could work a job and pay their way through school and borrow minimally,” Doe said. "But over the past 20 years, the cost of college has gone up astronomically and the median family income just hasn’t kept pace."


Iowa was the second-worst state for student debt in a national study by the Institute for College Access and Success of the graduating class of 2005. New data based on the class of 2011 shows Iowa dropping a few spots, to sixth.

Debbie Cochrane, the institute’s research director, said Iowa’s drop to the sixth rung is because of improvements in Iowa and worsening debt in other states.

One factor for still being in the bottom 10 was the Iowa State debt rate, Cochrane said.

“That one college has a huge impact on Iowa’s debt,” she said. "Over one-fifth of bachelor’s degree graduates go through that school."

Roberta Johnson, director of student financial aid for Iowa State, said the university has worked to educate students about debt, making sure students know how much they owe and what options they have when they start to repay loans.

In 2012, students from Iowa State graduated with an average debt of $30,374.

“Our debt level at ISU is not where we would like it to be, but with the economic downturn and losing some federal grants, we’ve maintained the same level,” Johnson said. "While it looks like we are not making a lot of progress, the fact is that we are."

She pointed to a lack of state grants as one of the challenges facing Iowa’s public universities.

Roughly 92 percent of need-based state grants in Iowa were awarded to students in private colleges.

“The fact that we have not had a sizable increase in the state grant program for years has certainly had a negative impact on our student debt,” she said. "Without a grant program that can provide some money that will really have a meaningful impact on students, the alternative is to take out loans."

(Reporting for this story was contributed by Emily Drees, Iowa State University/Iowa State Daily; Lauren Horsch, Drake University; Christopher Emery, Mount Mercy University; and Kate Hayden, Simpson College. IowaWatch is a nonprofit investigative and public affairs news organization that does collaborations with news organizations in Iowa. For more, go to


I'm the city editor at the Quad-City Times. You can reach me at or 563-383-2450.