Down With Debt

Kambak Family seated together
Photo | Parrish Evans '11

Is college worth the cost? Empirical data says yes. So do a couple of Pacific University alumni, now that they have paid off all the debt they accrued during and immediately after school.

Emily (Hobizal) ’08 and Colin Kambak ’06 accumulated debt while at Pacific University. Together, they carried some $60,000 in student loans, on the high side of average for an undergraduate today. Then there was the $22,000 on credit cards, amassed as Colin struggled to find steady work during the Great Recession. Add in a couple of car payments, and they were looking at $90,000.

The turning point came when they overdrew their bank account three times in a single day shortly after their wedding.

“Here I was with a new wife, and the first month I was asking her dad for $200,” Colin said. “It was not good.”

At that moment, they vowed they would never ask their parents for money again, and they would stop letting their debt hold them hostage.

Five years later, the couple was completely debt free, raising their first child, and ready to buy a home.

For the Kambaks, the process of going debt free was both a practical and faith-based one. They had heard about Christian financial author Dave Ramsey at church and picked up his book after the overdraft incident.

“Colin read it in one day,” Emily said. “Then he made a list of everything we could sell and for how much.”

The overall philosophy, the Kambaks said, is to live very simply for a short time in order to live with more freedom in the long term. Ramsey advises starting by saving $1,000 for an emergency fund, then paying off the smallest debts first — by all means possible.

The Kambaks cut out cable, moved into a tiny apartment, and sold whatever big ticket items they had, like a couch for $800, and even many of their wedding gifts. They traded in their relatively new cars for older, cheaper options. They had a few happy accidents — surprise inflows of cash they attribute to the power of faith.

The quicker we were out of debt, the quicker we could live our lives."

They budgeted ruthlessly, and stopped buying new clothes or going out with friends in the evening.

“We were going against what all of our friends were doing. Not going out to eat, saying no to things,” Emily said.

It was hard, but they kept the end goal in mind.

“It was something we had to, as a couple, decide,” Colin said. “We were OK with living a more simple life for a while.”

It took a year to pay off their credit cards, a little longer for the car, and three years for the student loans. They allowed themselves to spend a bit more when they were expecting their daughter, Claire, now 2, but even then stayed focused on a simple, debt-free life.

“Both our parents thought we were crazy, but we felt like slaves to debt,” Colin said. “The quicker we were out of debt, the quicker we could live our lives.”

The Kambaks are undoubtedly an exception.

On the other end of the spectrum are the stories of college graduates with hundreds of thousands of dollars in debt and no jobs.

In between is a still troubling reality: Tuition is on the rise, students are graduating with ever more debt, and the economy, while recovering, isn’t necessarily offering the jobs or salaries to keep pace.

Earnings Chart

For many, it begs the question: Is a college education worth the cost?

A recent Washington Post headline said student debt is like “having a hefty mortgage without an actual house.”

In fact, the average student loan debt is about $29,000 for undergraduates nationwide, and about $25,000 in Oregon. That’s more like having an expensive car payment, albeit spread over decades rather than a few years.

Tuition has undeniably skyrocketed in recent years — public schools rising more rapidly than private, as government funding for state universities takes cuts.

That, too, is complex, though, as — like with a car — few students pay the sticker price.

At Pacific, for example, incoming freshmen see an average discount of nearly half of the published tuition rate. That puts Pacific’s aid above many of its peers, but the average among private colleges in Oregon is a first-year financial aid package of more than $17,000, not including loans.
Pacific undergraduates do take out an average of $7,000 a year in student loans, though. And while private university students are more likely to graduate in four years, mitigating some costs, and are less likely to default on their loans, that’s still some $300 a month out of a young professional’s income.

For the past few years, President Lesley Hallick has used her State of the University address to discuss the “brutal facts” facing higher education, including the challenges of keeping a share of a declining pool of prospective students.

In the short term, Pacific has worked to bolster its articulation agreements with community colleges, making it easier for students to transfer from a community college. Pacific draws more transfer students than any of its private institution peers in the Pacific Northwest and has built additional partnerships with schools in Hawai‘i to continue offering students a path to a bachelor’s degree.

Fundraising at Pacific also has been a priority, with the endowment growing 32 percent in the past five years. That endowment is what allows Pacific to offer deep tuition cuts and scholarships to students, among other things.

Additionally, while maintaining its rich liberal arts and sciences programs, Pacific also is looking for ways to offer students a more direct path to the workforce, if that’s what they want. That includes investing in programs like an undergraduate teaching track for prospective teachers of science, math and English as a second language, as well as the university’s first fully online bachelor’s program, a degree-completion program in health sciences.

In 2014, Hallick launched Imagine 2020, an internal effort to turn the university’s strategic plan into reality by identifying the specific innovations and ideas to improve efficiency and change the model of education to better meet students’ needs — and budgets.

Back to the car, or mortgage, metaphor, though: Is student loan debt like having a payment for no asset?

Is a college education worth the cost? Empirically, the evidence says yes.

Even before the economy fully recovered, the National Center for Education Statistics found that young workers with a bachelor’s degree were significantly better off than those without.

In 2012, the average worker, age 25 to 34, with a high school diploma earned $29,960 a year, compared to $49,900 with a bachelor’s degree. A master’s degree added another $10,000 a year on average.

That four-year degree can mean an average of nearly $20,000 more a year, even early in a career.

Likewise, a recent study by the Federal Reserve Bank of New York found that a worker with a bachelor’s degree earns, on average, more than $1 million more in a lifetime than a worker with a high school diploma.

Anecdotally, it may not always feel that way.

Colin Kambak spent the first three years out of college struggling to find steady work with his degree in biology.

He worked in seasonal and temporary positions, earning $11 an hour his first year out of college, about what he could have made working summers at home in Alaska.

“I think all of us in college have these grand ideas of what’s going to happen when we graduate. I expected an average job, $40,000 to $50,000 a year,” he said. “I’d wonder, ‘Is this just the field? Or the economy? Or is it just me not being good enough at marketing myself?’”

Ultimately, though, he ended up with the City of Portland’s Environmental Bureau. Emily, who majored in exercise science, worked for a health company right out of school and eventually moved to a position analyzing running apparel for Nike.

Both say their time at Pacific offered them an invaluable small school environment, lifelong relationships, and the potential for career success — not to mention support from the university’s Career Development Center years after graduation.

If he was starting over today, Colin said he might try to take out fewer loans and pay for school as he went.

“Some people use debt as a tool. That’s too risky for us,” he said. But, he added, you have to assess the return on investment.

“Using a credit card to buy a burger is not a good deal,” he said. “A student loan to go to school, I don’t think it’s the worst thing to do. It provided me an opportunity to get an education right away … to have a college education and be able to get a good job.”

This story first appeared in the Spring 2015 issue of Pacific magazine. For more stories, visit

Thursday, Feb. 26, 2015