Odd jobs, student loans, and the Class of 2013

May 28, 2013

Credit JR Erspamer / Flikr

Days before Commencement at the University of Iowa, the music school’s Brass Quintet practices an old favorite.

From graduation ceremony to graduation ceremony, the tune never changes. But what is changing, is how graduates are mapping their careers afterward. Tuba player and PhD candidate Blaine Cunningham explains.

“Being a musician, sometimes we need to be creative with our jobs. I play with an orchestra, I teach at a couple colleges, I’m a freelance musician so I play a lot of gigs in the community, I teach private lessons,” he says.

In good and bad economic times, unemployment rates are twice as high for young people. During recessions, recent college graduates get hit extra hard.  

When Cunningham graduates, he’ll be faced with paying back years of student loans.

“At the time, you don’t think about what it’s gonna be like when you’re done, when it’s all adding up. It doesn’t seem that big, but it starts building up and building up,” Cunningham says. He’s worked to put himself through college, and took out federal loans to pay the rest.

“I probably could have taken fewer hours at a time and worked more, but honestly I’m in my thirties now and I’m still working to finish my doctorate. It would have taken even longer if I had done that.”

On average, Iowan borrowers carry $22,180 dollars in student debt, according to the New York Federal Reserve Bank. That’s actually lower than most other states. But college seniors at 4-year schools in Iowa graduate with an average of $28,753 in debt--the sixth highest in the nation, according to 2011 numbers reported by the Project on Student Debt at the Institute for College Access and Success.

In Washington, legislators are fast approaching a deadline to determine a federally subsidized student loan rate by July first. If they don’t come to an agreement, students across the country will see the interest rates on their Stafford loans double. A proposal passed by the House last week is not expected to be taken up by the Senate.

During prepared remarks, Iowa Senator and committee chairman Tom Harkin called the loan rate increase something Congress can ‘ill afford to do.’

“It’s estimated that over the past decade, 4.4 million college qualified low income high school graduates did not attend 4 year colleges, an additional 2 million did not attend college at all. What this tells me is that something needs to change, and urgently, if we want America’s education system to be an engine of equal opportunity,” Harkin said at a hearing of the Health, Education, Labor and Pensions Committee, which he chairs.

But after those loans are taken out and tuition paid, a sluggish job market makes it difficult to pay it back.  In a report called “The Class of 2013,” Heidi Shierholz of the Economic Policy Institute studied the effects of a recession on recent graduates.

“What you see is phenomenon of cyclical downgrading, where as a group they’re not going to get as high quality jobs. We’ll see a longer period of unemployment and earnings instability for this group,” Shierholz said.

She says the class of 2013 will be in a better position for the job search than graduates from the past four years, but they’ll have to compete with those who still haven’t found their first permanent position. Much of this research was done based on the careers of graduates from on the last severe recession in the early 1980s.

Today, many graduates may have little to fall back on, because unemployment insurance requires applicants to have a work history. Shierholz says that in bad economic times, many graduates end up going back home.

“And what I think that means, fact we have weak safety net for new entrants, family and friends end up picking up the slack. I think a hidden consequence is that can be a real burden to parents, who they themselves might be really struggling from effects of great recession and its aftermath,” Shierholz said.

Many families do see this as a positive. Eric Ritter, a new graduate from Coe College, is determined to be a weightlifting coach. To gain work experience, he’s planning on interning, working part time, and living at home for a while.

“My mom is pushing for it, I told her I’d help her pay bills, save money for my loan payments. But I want to get out on my own, start living my life. I just want to make sure I’m financially stable to a point where I can pay rent on an apartment,” Ritter said.

And still others have adapted by choosing certain fields of study. In Iowa, that means wind.

This year, Kirkwood Community College graduated the largest class in their history. Students sanding wind turbine blades for an advanced manufacturing class weren’t too worried about the job hunt, including 21-year-old Dillon Stradt.

“Everybody needs their power. Nobody’s going to give their video games up or their electricity. It’s a good career to get into, so that’s why I decided to get into it. I’ve got good job stability,” Stradt said.

After graduation, Stradt says he’ll work for an energy company in Minnesota—but for some of his friends who went to four year colleges or pursued other lines of work, it hasn’t been easy.