Posted on 05/31/2006 1:52:09 PM PDT by Graybeard58
WASHINGTON -- Nearly two of every three undergraduate students are going into debt to go to college, owing an average of more than $19,000, most often to the government.
Among a dozen states sampled, New York students averaged the largest loans, while those in Oregon and Minnesota were most likely to have borrowed. In Connecticut, the average student debt was $17,990.
About 65 percent of students who graduated in the 2003-2004 school year did so after getting student loans, according to the Department of Education's National Center for Education Statistics.
For students who took out loans, the average debt was $19,202. Of that sum, $17,022 came through federal loan programs.
The agency focused on 12 large, medium, and mid-sized states, but did not compile enough data from the other 38 states to create reliable statewide averages.
The figures show:
-- New York had the highest average loan amount, $20,838. Georgia and Minnesota followed. Of the dozen states studied, those with the smallest loan average were Nebraska, Delaware and California.
-- In Oregon and Minnesota, three of every four undergraduates got loans. Officials in both states said that was due to budget cuts.
State dollars "are covering less and less of the cost of higher education, and we've had several years of double-digit tuition increases," said Melinda Voss, spokeswoman for the Minnesota state college and university system.
Jacqueline King, an analyst at the American Council on Education, said she was surprised by the figures for Georgia, which has a college scholarship program designed to make higher education more affordable.
King said she believed the government's figures for federal student loan amounts are statistically reliable because they are based purely on government records, while the total debt amount is based on students' understanding of their future obligations.
The overall amount of student loan debt soared in the mid-1990s but has been relatively flat in recent years. King said she expects it to rise again after Congress voted to increase the limits on student borrowing from the federal government.
According to the College Board, private lending for student loans has exploded in the last decade, jumping from $1.3 billion in 1993-1994 to $10.6 billion in 2003-2004. Government lending for that year was $56.8 billion.
The biggest change, though, may be in the cost to take out government loans.
A general trend of historically low interest rates is ending, and the new government loans will have a fixed rate of 6.8 percent. If rates keep rising, students with the old variable rate loans could end up paying as much as 8.25 percent.
Figures for the 12 states:
-- California: 56.4 percent $17,266 average total loans, $15,259 average federal loans.
Delaware: 56.1 percent $16,473 total, $12,946 federal.
Georgia: 65.4 percent, $20,767 total, $18,505 federal.
Illinois: 63.2 percent, $18,788 total, $16,594 federal.
Indiana: 61.1 percent. $19,112 total, $17,566 federal.
Minnesota: 76.3 percent, $20,312 total, $16,406 federal.
Nebraska: 71.8 percent, $16,200 total, $15,373 federal.
New York: 67.2 percent, $20,838 total, $17,603 federal.
Oregon: 76.5 percent, $17,772 total, $16,641 federal.
Tennessee: 70.9 percent, $19,949 total. $17,852 federal.
Texas: 64 per cent, $18,508 total, $16,624 federal.
All states: 65.6 percent, $19,202 total, $17,022 federal.
Source: Department of Education's National Center for Education Statistics. The agency chose 12 states ranging of varying size to compile the figures, but did not gather enough state-specific data to create averages for the other 38 states.
If you come out with a worthy degree, then it's not so bad.
If you only went to college to "discover yourself" and took an easy major, then it's a very hard lesson (and perhaps a good one).
I can believe that New York's rates are the highest- simply the cost of staying alive will kill you!
So for the same money as a short term car loan you get an education loan payable long term...and the underlying asset holds value for life. Not a bad deal at all.
This college senior has no problem with that. There are people in other countries who would kill to get an opportunity to go to college here and get an American salary, regardless of the debt. Get a worthy degree and a good job (Hoover economy my ass), and show a little financial restraint, and you'll have that $20000 paid off before you know it. But of course, it's always easier to whine than to take responsibility for oneself.
Hey. Liberal professors need to eat too. <sarc.off
well-put!
Thanks. It is sad how many kids get discouraged from attending college because of having to go into debt...yet many of the kids that I knew that chose to not go to college for this reason all bought new cars right out of high school as there was no shortage of companies willing to finance the deal...for a large fee.
1) When universities discovered that more students were able to afford school, they began to raise tuition.
2) A rise in tuition meant that students needed to borrow more money, and, with easy loans, more was made available.
3) Go to step 1.
This leads to an overall increase in prices for an education.
The same thing happens with US health care.
The more money the government pumps into the system, the higher prices go.
Of course, many people get squeezed out in the process.
My favor part of the spin the CBS put on this story was how these debts were 'crimping' the lifestyles of this college grads. They didn't have as much money to spend travelling and buying stuff and they were able to buy homes. Huh? College grads buying homes before they even start up their careers? Wow, do these kids have unreal expectations.
The trouble is that these easy loans make school more expensive for everyone.
Those that don't take out loans end up paying more in inflated prices.
And since the government is making the money available, they are partly responsible.
very true. my schooling was mostly paid for with scholarships (thank you SATs!), but after my freshman year, I found a deal with Frost Bank where you could borrow up to $2000/semester (now its up to $2500), interest-free, as long as youre enrolled full-time and keep the GPA above a 2.75 (I believe). You have to make $35/month (now $50) payments, which goes against the principle. The loans will be interest-free for two years after I graduate. I really didnt NEED the full amount that I could borrow, but I went ahead and did so and just let the rest sit in the bank and accumulate interest, and automatically drew the monthly payments from the bank. It doesnt amount to a massive sum, but I've been earning interest on someone else's money, and its there if I have an emergency and really need to tap into it.
Come in as an illegal and you get to go to college for free.
We will have managed a college education for our son, tuition free.
We used dual enrollment during high school (which is a tuition free program and he earned his AA during his high school years.)
Florida has a generous merit based scholarship (paid for by the lottery) called Bright Futures and if you choose a state university, and make a respectable score on either ACT or SAT, you are awarded either a 100 percent tuition scholarship or a 75 percent tuition scholarship (for a lower SAT/or ACT.)
We happen to live in an area where there are several state universities, so add to that the fact that the student lives at home, and you have a Bachelor's degree for the cost of books (which I estimate to be around six thousand for the four years.)
At the rate they were lending money at a couple of years ago, you were crazy NOT to take out the loans. My daughter consolidated all her student loans and is paying them back at the obscenely low rate of 2.85%!
It took six years but, paid as I went owning nothing when at graduation. I ate the same type of foods that some of people turned down as not good enough in some stories after Katrina. And liked it. I have since made up for the the food i missed. :-(
*****Huh? College grads buying homes before they even start up their careers? Wow, do these kids have unreal expectations.*****
Actually, a friend of mine and his brother bought a house near campus while they were going to college. The monthly payments werent much more than they would pay for an apartment. After his brother's graduation, he continued to live there and charged rent for a couple of roommates. Then he graduated just last fall, and is making money on the deal now, while building equity. And being near UT (in Austin), the value of the house is only going to increase.
I wouldnt say thats a bad plan.
Sounds like there ought to be an investigation into our institutions of higher education for PRICE GOUGING!!
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