As students look ahead to graduation, there could be some hope for reducing student debt, at least in the beginning.
A new income-based loan repayment system could be helpful for some students entering a low-paying job after college.
For others, even those participating in the Occupy movement, it's a reminder that a college education is worth the cost.
"Debt is one of those things you have to deal with regardless if you want your education," said Kai Bennett, supervisor for Student for Creative Social Activism and a psychology and philosophy double major.
"I want my education bad enough," Bennett said. "I'm in a situation where it's either that or stay in the working class. Pretty much those are my choices."
He voiced a common sentiment as students realize that college is becoming more important but less affordable. The student loan program was created in 2009, but President Barack Obama revised it recently, allowing some graduates to pay just 10 percent of their earnings to start, and loans could be mitigated after 25 years if steady payments are made during that time.
Brittany Gerig graduated in 2009 with about $35,000 in debt. She now works at Townsend Corp., a company in Parker City, Ind., that deals with power energy.
"I've been fortunate," she said. "I got a good job right out of college. Instead of going out and buying a new car, I'm putting extra money toward my loans."
Gerig said she won't be affected by the income-based repayment system. Instead, she's paying back more than she needs to each month so she can pay off her debt sooner.
"I knew all through college that I'd taken out quite a bit and that I would need to budget and be careful about paying it back when I got out, so I'm trying to live frugally and pay them back as fast as I can," she said.
THE NEW SYSTEM
Rob Wirt, associate director of financial aid, calls the new program a step in the right direction.
About 12,100 Ball State students are using federal Perkins loans — both direct subsidized and direct unsubsidized — and 904 students are using private loans, according to records from the Financial Aid Office.
"Certainly, we need to do more to help our students," Wirt said. "I'm not sure if it is going to have a big impact on their application. But any impact is positive."
Finance instructor Ann Reichle said she hopes students understand the implications of borrowing and spending, and she's glad Ball State now requires students to take an introductory finance course.
The average student debt for graduates at Indiana colleges is $27,001, and it's a little more than $24,000 at Ball State, according to the Project on Student Debt. About 66 percent of Ball State students graduate with some debt, according to the project's website.
The program was created by the Institute for College Access and Success and aims to increase understanding of rising student debts and implications for families, the economy and society, according to its website.
Reichle said she hopes students understand what they're taking on. For example, debt consolidation means getting a new interest rate, and students should consider if the new interest rate will benefit them.
According to an analysis from the Chicago Tribune, a person with a single income earning about $25,000 could pay just $108 a month toward student loans. That amount increases according to a person's salary, so not everyone is eligible to make such low payments.
Part of the incentive calls for quicker debt forgiveness if a student offers their time for public service. Reichle said she likes that option.
"We're a country with a lot of debt," she said — about $15 trillion, according to the U.S. Debt Clock. "The things that add to that debt add concern. As a group, I like the idea of students benefitting from reform."
Reichle suggests taking out as little in student loans as possible.
"So trying to keep the balance minimal — trying to project and understand what that loan payment is going to be. ... It's not too early as a university student to be tuned in to your personal financial situation," she said.
HOW IT HELPS
Wirt said the new system can help low-income graduates ensure their payments don't become delinquent.
"It does help students who fall into those categories that earn such a low level," he said. "Even a $50-a-month payment is a big burden for them.
"Their payments could be greatly reduced and perhaps [they will] not [have to] make any payments while they're not making any money."
Justin Nicol, a senior architecture major, said he thinks the new program will make it easier to pay back student loans.
"Regardless of the job that I get, whether it's a high-paying one or a low-paying one, it'll make it easier."
Junior biology major Jennifer Thomas agreed.
"It would probably affect me in a good way," she said, "because when you get out of school, regardless of your degree, you're probably not making that much money."
-Sarah Boswell and Derrek Tipton contributed to this story.
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