With more than $1 trillion in student loans outstanding in this country, crippling debt is no longer confined to dropouts from for-profit colleges or graduate students who owe on many years of education, some of the overextended debtors in years past. Now nearly everyone pursuing a bachelor’s degree is borrowing. As prices soar, a college degree statistically remains a good lifetime investment, but it often comes with an unprecedented financial burden.
Ninety-four percent of students who earn a bachelor’s degree borrow to pay for higher education — up from 45 percent in 1993, according to an analysis by The New York Times of the latest data from the Department of Education. This includes loans from the federal government, private lenders and relatives.
For all borrowers, the average debt in 2011 was $23,300, with 10 percent owing more than $54,000 and 3 percent more than $100,000, the Federal Reserve Bank of New York reports. Average debt for bachelor degree graduates who took out loans ranges from under $10,000 at elite schools like Princeton and Williams College, which have plenty of wealthy students and enormous endowments, to nearly $50,000 at some private colleges with less affluent students and less financial aid. The current balance of federal student loans nationwide is $902 billion, with an additional $140 billion or so in private student loans. [Read more at the NY Times]
Student Debt and the Class of 2010
Two-thirds of college seniors graduated with loans in 2010, and they carried an average of $25,250 in debt. They also faced the highest unemployment rate for young college graduates in recent history at 9.1%. Our new report, Student Debt and the Class of 2010, includes average debt levels for the 50 states and District of Columbia and for more than 1,000 U.S. colleges and universities.
Sharp Uptick in Federal Student Loan Default Rates
New data released by the U.S. Department of Education shows a sharp increase in the rate at which student loan borrowers are defaulting. The official "two-year cohort default rates" show that 8.8 percent of student loan borrowers who entered repayment in 2009 had defaulted by the end of 2010, up from 7 percent for those entering repayment in 2008. Our resource page provides background and useful links about cohort default rates for reporters, policymakers, and the general public.Visit the Cohort Default Resource page
Critical Choices: How Colleges Can Help Students and Families Make Better Decisions about Private Loans
Our new report Critical Choices: How Colleges Can Help Students and Families Make Better Decisions about Private Loans documents promising practices that a variety of financial aid offices are using to help prospective borrowers avoid unnecessarily risky and costly debt. It also identifies some problematic practices that bypass key opportunities to inform students' and parents' borrowing decisions.