14. Interview with Dr. Aileen Parks: Part 1

Dr. Aileen Parks is formerly the Executive Director of the Financial Aid Department at University of North Florida, currently teaching graduate courses in the Political Science department. A petite but forceful looking woman in her mid forties, Dr. Parks has an air of prestige that surrounds her like a cloud. Dr. Parks has agreed to be a consultant regarding the current state of the U.S. college system, a relevant area of expertise for the current investigation.

16 July 2011

– Of course. A tricky subject, the inner workings of the financial market known commonly as the post-secondary education industry.

– [Dr. Parks gives a smug grin] Yes, financial market, that’s no slip of the tongue. Universities are and have been, for a fairly long time now, an industrial market no different than, say, the car or computer industry. Make no mistake, post-secondary educational institutions are businesses. Businesses operating under the mask of public service.

– Well, that all depends on what aspect of education financing you’re speaking of. For example, and according to recent studies, majority of bachelor’s degree recipients walk across that graduation stage with over $25,000 dollars in student loans, the average debt for graduates not pursuing a post-bachelor’s degree. This is money that is necessary to fund the ever-increasing costs of their college education.

– It sounds like an insignificant amount in the long-term scheme of things, so I’ll put that number in perspective: the average loan terms put repayment as taking place over a period of 120 months—or ten years. With current federal loan interest rates as high as 6.8%—private loan interest rates are much higher—and a total loan amount at the average stated of $25,000, the lowest a typical bachelor’s degree recipient can expect to be financially liable for are payments of around $270 a month for the next ten years of their post-collegiate life. This is a low-end figure. These graduates will eventually pay out an average total of $32,000, including $9,000 in interest alone, strictly for federal loans. Private loans are an even more aggressive breed, coming in at sometimes quadruple that amount.

– Yes. That’s the average. That includes all students in the college system, includes the students receiving full paid scholarships, includes the student’s whose parents are poor enough to meet the requirements to receive financial assistance that they don’t have to pay back. And anybody familiar with mean—or average—calculations knows that introducing a zero value into the numerator and adding a one to the denominator drastically changes the resulting value of the average. Some students are lucky enough to have none or lower-than-average debt coming out of a four year public or private university. Most are not.

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