Help! We owe $140K to the University of Phoenix

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The Mosleys
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The Mosleys

Without student loans, Patt Mosley’s husband, Duke, wouldn’t have been able to go back to school, change careers and vastly improve his happiness. Loans enabled him to earn his bachelor’s and master’s degrees, and loans helped her get an MBA. Reaching these goals was a priority for their family, but Patt Mosley doesn’t know how they’ll ever repay the money they borrowed to do so.

Between the two of them, the Mosleys have nearly $140,000 in student loan debt after graduating from the University of Phoenix, a for-profit university. For the most part, she says it has been worth it.

Deciding on Debt

In some ways, the timing was both perfect and terrible. Duke Mosley, 42, had been laid off from a career he never really loved, which presented an opportunity to pursue his dream of becoming a teacher. At the same time, Patt Mosley, 43, was a cancer patient, and the medical bills were extremely expensive, even after insurance.

Duke had gotten his bachelor’s degree from the University of Phoenix, so he went back for his master’s. The Mosleys took out federal student loans, and he earned his master’s degree in education online.

Looking back, it may have been too easy, especially when it came to borrowing for her own master’s, Patt Mosley says.

“It’s not that hard to apply for a student loan,” she says. It also wasn’t difficult to get into the University of Phoenix. At the time she chose to go there, she was studying for the GMAT, the test most business schools require for admission, and studying for it was a grueling process. One day, the University of Phoenix came to her work to promote its programs, including their MBA, which doesn’t require GMAT scores for admission. That was the decision-maker for her.

“They make it very, very easy for you to apply and get admitted,” she says, “as long as you’re willing to get student loans.” University of Phoenix graduates aren’t the only ones struggling with student loan debt. Debt has caused huge problems for graduates of all kinds of institutions. However, statistics show that graduates of for-profit programs are much more likely to default than those of more traditional colleges and universities.

Ryan Rauzon, a spokesman for Apollo Education Group (APOL), which owns and operates the University of Phoenix, responded to some of Mosley’s comments in an email to Credit.com. He said they carefully watch students’ borrowing behavior and try to help them manage loans responsibly.

“We’re proud of our record of counseling students to avoid over-borrowing,” he wrote. “Extensive tools and resources are given to our students — before and after enrollment — to help them minimize borrowing and apply financial literacy skills.”

Weighing the Worth of Education

More than a decade later, Patt Mosley thinks it was a poor choice. She borrowed only about $30,000 for the program, because she worked during her first year and received funding from her employer. Her loan may be a sliver of their debt, but Mosley says the degree isn’t doing much more than sitting on her resume.

“I’ve been told managers don’t care about my academic pedigree, which is fairly disheartening,” Mosley said. “One of my biggest concerns after I had started with University of Phoenix was how credible that would look on my resume, but I had teachers who were MBA graduates from Harvard.”

Rauzon emphasized the business faculty’s many years of collective experience, saying all  instructors “hold master’s degrees or higher and have an average of 20 years of experience as CEOs, CFOs, COOs, presidents and more.”

The experience of the faculty aside, Patt Mosley says she doesn’t use much of her education in her own job. “If I had gone back, I would have just taken the GMAT and gone to a more established university.”

She and her husband were displeased with the lack of student support he received when he was trying to meet his student teaching requirements. It worked out, he graduated last year and he landed a teaching contract.

“From a career standpoint, and personally, it was the best move,” Mosley says of her husband’s expensive education. “This is the right path for him, but the master’s was kind of a requirement.”

Post-Graduate Payments

The Mosleys aren’t students anymore, which means it’s time to repay all those loans. Duke has applied for income-based repayment, but Patt’s salary from her career in marketing disqualifies her from such benefits, she says. The roughly $1,500 student loan payment they have to make each month is more than their mortgage payment.

They have a 9-year-old they’d like to send to college, but they also have the mortgage, credit card debt and personal loans — much of the credit card and personal debt stems from the cost of treating Patt’s breast cancer, which is in remission but requires that she take expensive medication. She has been putting her checkups off recently, because she gets treated in Portland, Ore., but they live in eastern Washington.

“We haven’t been able to catch our breath financially since 2007, which is when I was diagnosed,” Mosley says. “We’re just waiting to see a light at the end of the tunnel.”

They’ve gone to a debt consolidation company and are trying to rebuild their credit, but that can take a lot of time. Reducing credit card debt could be a big help — debt use is one of the greatest factors in your credit score — but that’s certainly a challenge when you’re living paycheck to paycheck, like the Mosleys.

“What’s disappointing to me is there’s a push for higher education in the United States,” Mosley says, “but there’s nothing out there that really does support or help people like me get a break.”

If you want to see how your student loans are affecting your credit, you can see two of your credit scores for free, a snapshot of your credit strengths and weaknesses and a personalized plan for building your credit on Credit.com.

Image courtesy of the Mosleys


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