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Deepening student debts cause for worry

Posted by gradefund on December 5, 2008

http://www.collegenews.com/index.php?/article/deepening_student_debts_cause_for_worry_37291/

Deepening student debts cause for worry
Graduate debt outpacing starting salaries

Ryan Simmons

The Project on Student Debt released on Wednesday its third annual report, “Student Debt and the Class of 2007.” The survey found that graduating seniors in 2007 carried 6 percent more debt than those in 2006, averaging almost $22,000, while mean starting salaries for graduates with bachelor’s degrees rose only 3 percent. The report broke down the data state-by-state: the lowest average student debts in the country were $13,266 in Utah, while the highest were $26,208 in Iowa.

The study also looked at the proportion of graduating seniors that had to cope with paying college debt. While the national average remained the same, around 59%, state averages were recorded to have increase in 25 states. The report notes that debt numbers may be artificially low, as they are reported by the institutions, which often do not have access to full information about student borrowing, discount transfer students in their records, or do not respond to questions about student debt.

Another survey, released Tuesday, by the National Association of Independent Colleges and Universities (NAICU), found that students attending private colleges are having a harder time securing loans to pay for tuition. Almost half of all private colleges report that some students have to take time off or go part-time due to financial troubles.

Of over 500 institutions surveyed, about 75% claimed they have received more requests for aid than in previous years, and 20% reported smaller incoming classes then expected. Rising tuitions and the state of the economy have made it increasingly hard for families to plan and pay for college, even with the largest number of graduating high-school seniors since the Baby Boom.

The survey found that nearly half of all private colleges reported students who could not secure a loan this academic year, most of whom had to take time off or start working part-time. Sarah Flanagan, the NAICU’s vice president for government relations, told BusinessWeek, “There are a concerning number of students who have had to change their educational plans because of a lack of credit.”

10/23/08

The starting salaries for graduating college students is outplaced by the debt accrued during their time attending school
Highlights
  • Student debt rose 6 percent between 2006 and 2007, while graduate starting salaries rose 3 percent
  • Students attending private colleges are having a harder time securing loans
  • Nearly half of colleges reported students taking time off for financial reasons
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