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A financial challenge: ND student debt v. jobs market

Students headed for the University of North Dakota's aviation program are told up front the financial situation they'll face after graduation.

It's important for them to know that they would carry at least $40,000 in debt while starting salaries typically start at around $25,000, according to Ken Polovitz, assistant dean of the aviation department in the School of Aerospace Sciences.

Some aviation graduates, without help from family, can carry up to $100,000 in debt, including tuition and flying fees.

"The aviation industry, especially the flight side of it, is a major investment up front and the payback initially isn't very good," Polovitz said. "That's just the reality of the profession."

Students in other majors may not face as big a spread between their debts and their salaries.

But reports from UND and the North Dakota University System show that wages for many graduates have not kept up with inflation even as student-debt loads reach record levels.

University officials say it's more important than ever for students to be realistic about their finances and gain real-world experience while getting an education.

Heavy debt load

In the 2010-2012 school year, undergraduate and graduate students at UND and North Dakota State University borrowed an average of $7,855 in a year, according to the university system report released Friday. That's up 125 percent over the past decade.

For a comparison, the Midwest inflation rate in that same period was 27 percent, according to the U.S. Bureau of Labor Statistics.

The increase indebtedness is due to a number of factors, including students' ability, starting in 2007, to borrow more than previously allowed, and the rapid increase in tuition rates, the report said.

"Changes in the estimated cost of attendance on NDUS campuses outpaced the growth rate of the major federal grant programs, resulting in more unmet needs which students funded through increased borrowing," it said.

After graduation, UND or NDSU alumni pay an average of $248 per month in loans, according the report.

Salaries lag

UND alumni living in North Dakota made an average salary of $36,862 a year in 2012, their first year out of school, said the UND report, which was released in May. Those living in Minnesota make an average $43,023. Those living in other states make $48,174.

The same study also broke down salaries by schools within the university, and it's pretty much as expected: Graduates of the School of Engineering and Mines and the School of Medical and Health Sciences make more than graduates of the School of Education and Human Development.

But it also shows that first-year salaries have not kept up with inflation for many. While engineering graduates have seen salaries grow 11 percent between 2000-2001 and 2009-2010, inflation in that period was 20 percent. Med school graduates have seen salaries grow 4 percent. Education graduates have seen salaries grow 23 percent. Aerospace graduates have it the worse; they've seen their salaries grow less than 1 percent.

With a new financial literacy program starting this semester, UND has made efforts to help all students better understand their finances early on.

Trish Hodny, the career services advisor with the School of Law, said first-year students there have had to take a similar course the past three years, and the program has been a success.

Promising careers

Some careers are seen as safer bets than others.

Ilene Odegard, interim director of UND Career Services, said health care jobs continue to be promising, as well as jobs involving math and science. However, a master's degree in business administration is becoming less lucrative because so many students have the degree, she said.

Although law school graduates may have tough luck finding work in other parts of the nation, fewer have problems in North Dakota. More than half of the students recently surveyed by the law school live in the state.

"It's always amazing the number of students who realize in three years that they like it here, and the opportunities are here," said Hodny.

Students in technical fields such as biology may require further education to succeed in a career. The UND study found half of the biology graduates responding to a survey were still students.

Secondary education is one of the few career paths available to graduates with only a bachelor's degree, said Isaac Schlosser, chairman of the biology department.

"It's a very information-rich discipline," he said. "You're just building a foundation as an undergraduate, and you'll specialize. Normally, it's either toward medically-related professions or you're going to get a master's of science or PhD."

Being ready

According to the UND report, the number of grads working at a job unrelated to their field of study has increased 6 percent since 2001.

Gaining a college degree in this economy is still extremely valuable, though the job pool has not grown large enough yet to accommodate the number of graduates, Odegard said.

"You have to work a little bit harder at getting that dream job," she said.

The university's biology department introduced a new course this year that gives students insight on the field. Professionals discuss the challenges they faced on their career path and what they did to succeed, said Schlosser.

"We need to be doing a better job in the early part of a student's education by giving them a clearer picture of what the opportunities are in the discipline, and what you do to prepare for these opportunities," he said.

Gaining experience at school -- either through internships or cooperative education programs -- can also be beneficial to students, said Odegard.

"Employers are looking for experienced hires," she said. "If you have that internship under your belt, you will have a 60 percent better chance of landing a job than someone who doesn't have related work experience."

Some of the best ways students can prepare for that first job is by keeping their Facebook pages clean, sharpening their writing skills and, most of all, being "realistic" in their expectations, said Odegard.

"I think if a student is willing to go anywhere the positions are, then they're all going to have success," she said. "You're going to need to be flexible, at least early on."

In the aviation department, Polovitz said he believes the industry will be forced to create better initial salaries, especially in light of an anticipated pilot shortage nationwide. "Airlines are going to have to step up and have creative ways of getting students through the expensive flight training and so forth."