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.
Copyright 2012 by The Associated Press. All rights reserved.
