College Debt Profiles

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Going to college is an awesome responsibility. It’s also a privilege. Kids growing up in the agriculture and livestock world have great opportunities to earn scholarship money and save money from show premiums, but the cost of higher education requires many to take out student loans. Here are profiles of two women who paid for college differently and faced unique consequences afterward.

Jara Settles, Kansas City, Missouri

 


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One might say Jara Settles was lucky in college.

She earned enough scholarship money to pay for tuition and wisely chose schools that were affordable yet would also set her on her best path to success. She had help from her parents and was able to spend that money on living expenses. She did not take on credit card debt, and even after attending undergraduate and law school, Settles graduated from college debt free.

But there’s more to the story.

When Settles was looking at colleges, she was offered an academic scholarship and a livestock judging team scholarship at Butler Community College in El Dorado, Kansas. These two awards covered all but her living expenses. Settles knew going to a junior college was dramatically more affordable than attending a four-year institution right out of high school. She lived frugally throughout her undergraduate years and didn’t overspend on her personal life, due to being busy with judging practice.

“I went to shows and spent time there with my family and friends,” Settles says. “And the other part is that when you’re so busy judging you don’t have much time to go out and spend money on extra things.”

Growing up in Hoskins, Nebraska, Settles showed bred-and-owned Angus and Maine-Anjou heifers. Once she decided to attend Butler, her judging coach, Chris Mullinix, helped her learn how to qualify for in-state tuition. Mullinix, who is keen on the in-state tuition policies, often helped judging students establish Kansas residency during their first two years of college.

“I am a big proponent of junior colleges,” she says. “But it still takes work. Students may not realize the need to main high GPAs to retain scholarships. If you can meet the requirements then the savings are pretty high. But, just because you get a renewable scholarship doesn’t mean you get to keep it. I had to be sure and make decisions based on those kinds of scholarships, because if I didn’t keep my grades up I would lose them.” When it was time to move on for her junior and senior years, Settles chose Kansas State University. Some of her scholarships required maintaining a high grade point average (GPA), and Settles worked hard to keep those financial awards.

Settles parents helped with her living expenses, a blessing she says, but she also credits the generosity of scholarships. She specifically credits the Angus Foundation because of the significant financial awards she received. The Angus/Talon Youth Educational Learning Program Endowment Fund scholarship, awarded by the Angus Foundation, paid for a large portion of her K-State expenses.

To give back, she and her parents are now giving to the Angus Foundation and other groups that benefitted Settles. She says young alumni of livestock programs should aim to contribute to their own schools and program funds once they are out of college and able to give.

Though she had good grades and had been thrifty during her undergraduate years Settles says her parents agreed that any further education would be on her own dime – a consideration when she decided whether to pursue law school. Since this was her dream, she set her sights on achieving a high LSAT score and was eventually accepted by several schools. Settles chose Washburn University in Topeka, Kansas, and graduated with a juris doctorate in 2014.

“I wasn’t sure if I could afford it,” she says. “The piggy bank was running dry. If I wanted to keep going that was going to be on me. One the best pieces of advice I can offer is to attend the best school you can afford and make strategic decisions in terms of not getting wrapped up in things that don’t equate to a dollar value.”

Washburn turned out to be the right choice for her both in terms of cost effectiveness and a quality legal education. Thanks to her high LSAT score and good undergraduate grades, she received and maintained a scholarship. She was accepted to other law schools, but she says none of them gave her as much financial support as Washburn.

“I had to weigh out the value of going to a well-known school and having to take out loans versus going to a school that was not as well known but having no loans at the end.”

Today, Settles lives in Leavenworth, Kansas, and works as an associate attorney at Shook, Hardy & Bacon L.L.P. in Kansas City, Missouri. Her finances looked great coming out of college, but then she faced a challenge when she tried to purchase her first home. Settles had never had a credit card until she began working at the law firm last year. She had never taken out a student loan. Basically, she had no credit and no credit history.

In retrospect I should have established some kind of credit,” she says. “I could have had more advantages on closing costs and PMI. It’s the traditional American dream to want to own your own home, but the fact that I had been fortunate to not have college debt actually worked against me when it came to buying a home.”

Settles says students who grow up in animal agriculture may already understand the rules of the game when it comes to loans and credit. Many 4-H and FFA members take out livestock loans, for example, to purchase show animals or improve their operation. If this is the case, Settles recommends maintaining good credit by paying off loans on time. She also recommends saving some of the earned income from selling show animals for college.

“If you can borrow money at a low interest rate and use your cash to invest in livestock or to somehow generate income then that money can theoretically earn a higher rate of return than the interest rate on borrowed money,” she says. “Make smart financial decisions and don’t be afraid to take out a loan if it is for the right reason.”

Analena Manbeck, Emporia, Kansas.

In high school, Analena Manbeck believed taking out a loan would be the worst thing in the world. The Barnard, Kansas, native earned scholarships and put herself through junior college, then transferred to a four-year institution. It was then she changed her mind and with no other option to pay for her college education, Manbeck stepped into the world of debt.

As if one college loan wasn’t enough she attended graduate school. There was a stipend associated with her master’s program but Manbeck had to use student loan money to pay for tuition and some living costs.

Taking a loan didn’t seem like the worst decision until the end of her loan grace period, which begins next month. This will put her in re-payment for 10 years. Though it’s a grim decision to take on student loans to pay for college, it’s a must for many students who pursue a degree. Manbeck says one decade from now she will be a happy camper.

“I had heard others talk about getting a part-time job and using scholarships to easily make their way through college,” Manbeck says. “I had scholarships out of high school but as I went through college new ones were harder to find. The more I learned about loans the less scary they were and when I had no other option I took them.”

Manbeck also attended Butler County Community College for two years as a member of the livestock judging team. She knew it was more affordable so the first two years of her college education she remained debt free. After Butler, however, Manbeck enrolled at K-State and spent two years working on a degree in feed science.

Pursuing her bachelor’s degree at K-State meant taking out student loans to cover tuition. During those two years her loan money only paid for course work and because she was taking 19-21 hours, four to six more than the average student, tuition was very expensive. Still, her debt load was not high yet. Manbeck says she relied on a part-time job and revenue from former show heifers to pay for living expenses.

Next she decided to pursue a master’s degree at K-State in grain science with an emphasis in pet food processing.

“What killed me was going to grad school,” she says. “I had a stipend to go to grad school, but I was learning to live on my own and had to manage going to school within my means.”

Manbeck says during grad school she had to get a new car, and she got married. Manbeck says she took advantage of student loans to pay for tuition and her paycheck to pay for other things. And though Manbeck now works as an engineer with Hills Pet Nutrition in Emporia, Kansas, she wishes she’d known more about student loans when she took them on.

Manbeck has attended financial advising group sessions, a service that is provided free on K-State’s campus. After four sessions, she now understands the terms and agreements that go with student loans. Manbeck is coming up on the end of her grace period and will begin paying back her loans on a ten-year agreement.

“I learned more in the last six months about student loans than I knew in college,” she says. “That is part of paying attention to the letter from the servicer but also what types of loans mean, when they should be paid back, what my payment option should be and how to manage that debt along with other expense. It’s the only place I learned that interest capitalized at the end of my grace period. There are so many details.”

And though Manbeck was still fortunate to have scholarships to pay for college, she is an example of how student loans and part-time jobs paid for her education. She says she opened her first credit card one year ago, and she’s had well-paid internships for two summers. All along Manbeck says she knew to save her full-time paycheck to help cover expenses throughout the rest of the year.

Now Manbeck’s debt is above the national average and if she’d understood the loan details and the impact of capitalization and interest rates she might have tried to fund college differently. Her husband also has student loan debt, and together they have a financial plan that will allow them to pay debt off independently before they buy a house and have children. Manbeck says there are no big vacations in their future plans.

“I am a little worried our payments will be high but my plan is to go into a ten-year repayment plan and get out of debt sooner rather than later,” she says. “We have to sit down and look at our budget and shift priorities around. If you ask me one year from now I am sure I’ll say I’m just used to it. But right now it’s a humbling experience, kind of a cold dose of reality.”

 

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