Graduation means payback time

By Paula Burkes Erickson

Published: May 28, 2006

Justin Pybas graduated this month from the University of Oklahoma College of Law. He has a six-month grace period before he has to begin paying back the roughly $75,000 he borrowed in federal student loans and a small bank loan to pay for his education.

"I'm kind of blocking it out and trying to realize it's a means to an end," said Pybas, 26.

His debt made the job search a little more nerve-wracking, he said.

"I wanted a job before loan collectors started knocking on my door," he said.

Pybas in August will join Conner & Winters law firm in downtown Oklahoma City. For now, he's concentrating on studying for the bar exam he takes the end of July. In addition to his college loans, Pybas is carrying a balance of $2,000 on his credit card, to which he charged his bar review courses.

For new college graduates such as Pybas, graduation means it's payback time. According to the Oklahoma Guaranteed Student Loan Program, the guarantor for 86 percent of federal loans to Oklahoma students, the average debt is $18,464 for students who borrowed to pay for an undergraduate degree at a four-year public or private school. Based on a maximum 8.25 percent interest rate and standard 10-year term, they'll pay $226 a month for 120 months, or $27,176 in total.

For Oklahoma's graduate borrowers, the average debt, excluding any outstanding loans from undergraduate school, is $39,897, which means a monthly loan payment of $489.

On the Norman campus of the University of Oklahoma, 47 percent of graduates from bachelor's degree programs have federal loan debt; the average is $18,494, said Brad Burnett, executive director of financial aid services. The cost of tuition, fees, room and board at OU for an Oklahoma resident living on campus is about $11,202 a year.

At the University of Central Oklahoma, 52 percent of graduates have debt, which averages $19,000, student financial aid director Sheila Fugett said. Cost to attend UCO is about $13,000 a year.

At Oklahoma Christian University, about three-quarters of graduates have loans, which average $22,000, said Clint LaRue, director of student financial services. Costs average $20,486 a year.

At Oklahoma City University, where annual costs for on-campus undergraduate students average $25,500 annually, the average debt for most graduates is $20,500.

"It's increasing every year, simply because the cost of education is increasing," said Denise Flis, financial aid director. "Federal grants and other free aid has been stagnant for the past three years, and the gap has been taken up by loans.

"We counsel our students not to carry the debt long-term. If, for example, they have a signing bonus for going into nursing or joining the military, we encourage them to use it to get the debt taken care of."

Meanwhile, industry observers are encouraged by two new federal grant programs that July 1 will become available to students eligible for Pell Grants. Generally, that's students from households with annual incomes of $40,000 or less. Under the Academic Competitiveness Grant, high-achieving freshmen and sophomore students will be eligible for additional free aid each year of up to $715 and $1,300, respectively.

Upperclassmen in math and sciences can get up to an additional $4,000 a year under a SMART (National Science and Mathematics Access to Retained Talent) grant.

"We think the new programs potentially will have a big impact in Oklahoma," said Bryce Fair, vice chancellor of scholarships and grants with the state Regents of Higher Education. About 80,000 Oklahoma students have Pell Grants.