2012-10-18 10:31:33
By JUSTIN POPE
It's the latest snapshot of the growing burden of student debt and it's another
discouraging one: Two-thirds of the national college class of 2011 finished
school with loan debt, and those who borrowed walked off the graduation stage
owing on average $26,600 up about 5 percent from the class before.
The latest figures are calculated in a report out Thursday by the
California-based Institute for College Access and Success (TICAS) and likely
underestimate the problem in some ways because they don't include most
graduates of for-profit colleges, who typically borrow more than their
counterparts elsewhere.
Still, while 2011 college graduates faced an unemployment rate of 8.8 percent
in 2011, even those with debt remained generally better off than those without
a degree. The report emphasized research showing that the economic returns on
college degrees remain, in general, strong. It noted the unemployment rate for
those with only a high school credential last year was 19.1 percent.
"In these tough times, a college degree is still your best bet for getting a
job and decent pay," said TICAS President Lauren Asher. "But, as debt levels
rise, fear of loans can prevent students from getting the education they need
to succeed. Students and parents need to know that, even at similar looking
schools, debt levels can be wildly different. And, if they do need to borrow to
get through school, federal student loans, with options like income-based
repayment, are the safest way to go."
The latest figures come at a time of increasing alarm about the sheer scope of
student debt nationally, which by some measures has surpassed $1 trillion.
Recent government figures show nearly 10 percent of borrowers of federal
student loans in the most recently measured cohort had already defaulted within
two years of starting repayment.
The issue has come up on the presidential campaign trail, though the
candidates' specific plans haven't become a major issue. President Barack Obama
has touted his record of ending $60 billion in subsidies to private lenders,
directing the savings to student aid and implementing an income-based repayment
plan that caps federal student loan payments at 15 percent of income and
forgives repayment after 25 years.
Former Massachusetts Gov. Mitt Romney, his Republican challenger, argues the
flood of federal student aid spending unleashed in recent years has led
colleges to raise tuition prices. He wants to return to a system in which the
government supports private lenders, arguing it's more cost-effective, and his
campaign has called the income-based repayment program flawed.
In Tuesday night's second presidential debate, Romney repeated an assertion
he'd made previously that "50 percent of kids coming out of college (are) not
able to get work." That is not accurate, though twice earlier in the debate he
made an important qualification, indicating he was referring to graduates who
couldn't get "college-level jobs." Figures analyzed by Northeastern
University's Center for Labor Market studies last spring did find 53.6 percent
of bachelor's degree holders under age 25 were either unemployed or working in
positions that don't fully use their skills or knowledge.
The latest TICAS report also cites studies that found more than one-third of
recent graduates were in positions that did not require a degree, depressing
wages, though other government figures cited by Georgetown University's Center
on Education and the Workforce put the so-called "underemployment" rate for
young college grads much lower at around 10 percent.
As for those who have no job at all, according to Georgetown the latest monthly
unemployment figure for college graduates under age 24 is 10.5 percent (the
figure typically jumps each spring as a new class graduates and declines over
the course of the year; last March it was 5.4 percent).
"Increasing student debt in a weak economy can be a knock-out blow to many
considering college," said Rich Williams, higher education advocate with U.S.
Public Interest Research Group, which advocates for students. "As our economy
is recovering, lawmakers must send every signal that college is a good
investment. "
Among other finding in the TICAS report:
Private (non-federal) student loans, which generally have weaker borrower
protections but have been diminishing as a source of student borrowing,
accounted for about one-fifth of the debt owed by the Class of 2011.
Debt levels vary widely by state, ranging from $17,250 in Utah to $32,450 in
New Hampshire.
Debt at individual schools ranged from $3,000 to $55,250 though not all
schools report that data.
Among colleges, the percentage of graduates with debt ranged from 12 percent
to 100 percent. At 64 schools, more than 90 percent of student graduated with
debt.
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Online: Companion interactive map with details for all 50 states, the District
of Columbia, and more than 1,000 public and private nonprofit four-year
colleges is available at http://www.projectonstudentdebt.org/
state_by_state-data2012.php
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Follow Justin Pope at http://www.twitter.com/JustinPopeAP