Student Debt Levels Rise, Along with Concern Over Borrowing
Money and concerns about debt weigh heavily on the minds of prospecitve college students and their families.
Nearly three-quarters of Americans say affordable cost is an important factor in deciding to pursue a degree, a recent survey out of Bellevue University in Nebraska finds.
Of all the reasons for going to college, about 37 percent of the 1,000 adults polled said affordable costs would be most likely to motivate them to earn a degree in the next five years. Yet, many do not believe going into debt to earn a degree is the answer. Only 40 percent said obtaining more education is worth taking on more debt and 55 percent said they would only pursue a degree if it would not put them into debt, according to the October report, The Search for Alternatives: Rising Cost and Massive Debt Put College Out of Reach for Many.
Despite these concerns, 71 percent of college seniors who graduated last year had student loan debt, the Institute for College Access & Success announced in its annual report on student borrowing,released Dec. 4. Among those who borrowed money for a bachelor's degrees earned in 2012, the average student loan debt was $29,400. Between 2008 and 2012, the combined average debt from federal and private loans rose an average of 6 percent each year.
For last year's college graduates, debt levels were likely impacted by state budget cuts that led to sharp tuition increases at a time when family resources remained stagnant. Had federal and state grant aid not increased, borrowing would likely have been even higher, the report said.
As students consider colleges, it is important to note that debt levels vary widely by institution and region. (See the interactive state-by-state map on the TICAS website.) The institute's new report includes lists of high- and low-debt states and comparisons of college borrowing patterns.
While students attending higher-cost schools often have higher debt, the report notes there are exceptions in which some expensive schools have low-debt averages and some reasonably priced schools graduate students with substantial debt. This underscores the importance of being a savvy consumer when considering college options. Cost-comparison tools, such as those available on the U.S. Department of Education's College Affordability and Transparency Center website, provide families with information on tuition and financial aid.
TICAS concludes with several recommendations for reducing student debt, such as increasing need-based grants, providing clearer financial-aid information, and strengthening the accountability of colleges with poor graduation rates that can leave students in debt without a degree.