Most Students Are Not ‘Drowning in Debt’
Aug 12th, 2009 @ 8:10 PM by Amber Nelson
Contrary to some flashy news stories, most U.S. college students are not graduating from college with excessive student loans, according to a story from U.S. News & World Report. A new study from the College Board, admittedly designed to “take down a notch the sensationalist stories about students drowning in debt,” according to study author Patricia Steele, found that a full third of June 2008 graduates completed their degrees with no outstanding government or private student loans. And only 10 percent of all graduates of four-year colleges had more than $40,000 in such loans at the end of their college careers. And most of those were students at private universities. The median amount of student debt (which does not include credit card or auto loan debt) was $19,999 for 2008 graduates, up only $1,026 from the median debt amount of 2004 graduates. Not a very significant increase.
For those who do have a lot of school debt, there is always the hope of finding an employer who will provide loan forgiveness. The government has been doing more of this in the past year, according to the Office of Personnel Management. In order to attract and retain quality employees, several federal agencies have started spending more on loan reimbursement. The FBI forgives loans for many of its criminal investigator and intelligence analyst recruits. The Securities and Exchange Commission and the Justice Department do the same for some of their new attorneys. In total, the federal government reimbursed $51 million in student debt in 2008, up 22 percent from the previous year.
Typically, students do (and should) take out student loan amounts that are relatively proportionate to the amount of money they plan to make out of school. So while there is talk of private student loan aid drying up, relatively modest loans still available from the government seem to be all that most students need these days.
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.
I am not sure where you are looking but I am a former student drowning in debt. I had to put my loans in forbearance twice because I cannot make the payment. I know others who are the same.
You should fact check better instead of taking a small sample of the population. It is not always relative to the actuality of what is going on.
YOU MUST LIVE IN DISNEYLAND!!
You obviously did no properly educate yourself before posting this article and you should be ashamed of yourself.
I am the parent of a 2009 graduate with $87,000.00 of PRIVATE Student Loan Debt AND an upcoming 2010 graduate who will have $240,000.00 in PRIVATE Student Loan Debt.
The financial aid system is absolutely shameful. Only foreigners and minorities seem to get the funding they need.
But the hardworking, white, middleclass families? No - they can borrow the money and be saddled with debt right out of the gate.
AND GUESS WHAT? THERE IS NOT ONE PLACE FOR YOU TO GO TO GET THE STATISTICS ON PRIVATE STUDENT LOANS - THE UNIVERSITIES DON’T HAVE THE STATISTICS - EITHER DOES ANY OTHER ENTITY.
GO TO A FEW UNIVERSITIES AND INTERVIEW EVERY STUDENT BEFORE YOU POST THESE LIES THAT LEAD OTHERS INTO A FALSE SENSE OF SECURITY. THINGS ARE GETTING WORSE EVERY DAY. GROW UP AND STOP LEADING PEOPLE TO BELIEVE THINGS THAT YOU HAVEN’T EVEN PROPERLY RESEARCHED YOURSELF.
* Note - There are no statistics available for Private Student Loans because the Lenders send the funds directly to the student, who must deposit the check in their own account and then pay the Universities directly for tuition, housing, meal plans, parking permits, books and supplies, etc. So, the Universities never know where the money comes from, hence no statistics.
you must be on some kind of bad smack… then again, I guess I would not expect anything more than an article like this from a site aptly named “loan.com”
God Bless America.
I currently have $149,000 in student loan debt. $65,000 of it is in a direct federal consolidation loan which is ~$350/MO
The rest in in private loans as follows:
$32,000 - $312/MO
$28,000 - $204/MO
$20,000 - $209/MO
$4,000 - $150/MO
I got a degree in computer engineering and, while I managed to find a decent starter job at $42,000/yr, the loan payments eat an entire paycheck EVERY MONTH.
My fiance is an assistant manager with small convenience store making $24,000/yr.
We are getting married soon and we have been wanting to buy a home and start a family or years, but have not been in the financial situation to do so. I am 30, she is 26, and the clock is ticking.
It saddens me greatly that our dreams of home ownership and of being able to start a family of our own are being held back by the huge amount of private student loan debt that I got myself into. The federal loans are NOT the problem. I consolidated them into a long term plan at a VERY reasonable 4.5%. The private loans, however, range from 7% to 10% and, since we are talking about large amounts here, that makes the payments on them TWICE the amount of my comparatively sized federal loan. I sincerely wish there were a government loan program that would allow me to consolidate my private loans into a federal loan at 4.5%. That would make my loan payments ‘only’ $700/MO instead of 1275, simply by having a lower interest rate! $700/MO would be hard, but manageble. $1275 is killing our life. I do not blame anyone else but myself for getting me into this mess, but I really wish, with all of the money the government is throwing around to banks and car corporations, that there would at least be SOME help for people in my situation with large private loans. I mean, why do private loans even EXIST? WHY can I not completely fund my education with federal loans? Why does one have to take out private loans in the first place? It does not make any sense to me.