Average student debt hits $26,600 while job outlook still bleak for college grads
A survey of mostly nonprofit public and private four-year universities released Thursday reveals that the average student debt load for 2011 graduates increased yet again to $26,600, a 5 percent increase over 2010, according to the analysis by The Institute for College Access & Success (TICAS).
That is coupled with a higher-than national average unemployment rate among college graduates — 8.8 percent. The report aslo notes that 19.1 percent of recent graduates are underemployed or working part time and 37.8 percent are working in jobs that don’t actually require a college degree.
“The class of 2010 and the class of 2011 have really faced enormous challenges in terms of graduating and being able to find employment, and employment befitting their educational status, in particular,” Debbie Cochrane, the research director TICAS, told Raw Story.
The report notes that average debt loads vary wildly by state and even from college to college, highlighted by an interactive map on TICAS’ website. “What you can find in a number of areas is that colleges that seem pretty similar, meaning that they’ve got similar tuition levels, maybe they even enroll a similar proportion of low-income students, but their debt levels are profoundly different,” Cochrane said.
The report points in particular to two colleges in Pennsylvania. “Indiana University of Pennsylvania has relatively high average debt, while Clarion University of Pennsylvania has relatively low average debt,” the report said, even though “Both are public four-year colleges with tuition and fees of about $7,500, and about two-fifths of their undergraduates come from low-income households.”
Cochrane said, “Unfortunately too little data is available to consumers.” TICAS’ report was compiled out of data voluntarily provided by schools, and though they estimate this report covers about 79 percent of bachelor’s degrees earned in 2010 and 2011, many colleges — including many for-profit colleges that target low-income students — chose not to disclose the data.
“Twelve percent of the colleges that reported debt data for 2010 didn’t report for 2011, and virtually no for-profit colleges reported at all. The need for federal collection of key debt information at all colleges could not be more clear,” said report author Matthew Reed in a press release. The report recommends the Department of Education expand the amount and type of data it collects to better illustrate a picture of debt level for students upon graduation.
TICAS also recommends a strong commitment to funding Pell grants, which help the poorest students, as well as a number of reforms to predatory private student loans.
These recommendations are backed up in an ombudsman report released this week by the Consumer Financial Protection Bureau (CFPB), which summarized complaints filed over lending practices in the private student loan industry. The CFPB’s student loan ombudsman, Rohit Chopra, noted many of the nearly 2,500 complaints they’d received since the agency began collecting them in March mirrored many widespread abuses in the mortgage market.
“Mortgage borrowers have complained, among other things, about inappropriate application of payments, timeliness in error resolution, and inability to contact appropriate personnel when facing economic hardship. Many of these complaints are strikingly similar to the input provided by and complaints received from student loan borrowers,” Chopra wrote in the report. One student reported to CFPB that she was still incurring late fees even though she was signed up for automatic payments to her lender.
Still, a college degree — as scary as student debt that might come along with it can be — is by far a better bet than no college degree. “Despite the fact that debt is growing, research continues to show that college degrees pay off,” Cochrane said. A report from the Georgetown Center Center for Education and the Workforce released last year found that those with a bachelor’s degree could expect to see an average lifetime earnings boost of $2.27 million.
“You hear a lot of stories about the extremes of student debt,” Cochrane continued. Still, “most [students] graduate with a level of debt that’s manageable and that they will pay off.”
[College graduate via Shutterstock]