Most college graduates won’t face an uphill battle paying off student loans according to a report in The Chronicle of Higher Education.
The report, published in the Chronicle’s May 22 issue, said 65 percent of college students leave school with debt, and the average debt is about $20,000. About 8 percent of students nationwide borrow twice that amount, but the report said perceptions of widespread financial trouble for college graduates are overblown.
The average debt of $20,000 is manageable, said Rick Shipman, director of the MSU Office of Financial Aid.
“We don’t see large amount of students leaving MSU with large amounts of debt,” Shipman said. “If you’ve borrowed under $10,000 you’re considered to be golden. If you’ve borrowed between $10,000 and $20,000 you’re in the average ballpark.”
Shipman said that borrowing more than $30,000 can set students up for problems.
“It’s common sense that high debt can be crippling,” he said.
Still, he said most MSU students manage to make their loan payments. As of 2006, 1.4 percent of MSU students were two years late on their payments and declared in default.
Electrical engineering sophomore Darrius Bosket knows he’ll leave MSU with debt, but he’s trying to keep it under control.
“Right now I’m trying to keep (my debt) less than $20,000,” he said. “I’m trying to pay back interest and work to pay some tuition.”
Other MSU students, however, are facing more debt than average.
Anthropology senior Julie Beaudoin said she took out a mix of federal and private loans, totaling about $40,000, and needs to take more for graduate school.
“I’ve been wondering (whether the loans are worth it) lately,” she said. “I haven’t come up with an answer yet. I’ll have to see what happens before I decide. I suppose I could have gone to a community college or chosen something cheaper where I could have gotten more scholarships.”
Although many college graduates will be able to pay off their debt, Phil Gardner, director of the Collegiate Employment Research Institute, said the debt issue is more serious now than in the past.
“When (students) entered college, things looked really good. Salaries were up. … The (baby) boomers were going to retire and there were going to be all these jobs,” he said. “Now everything is on hold. Boomers can’t afford to leave the labor market. What are young people going to do in the meantime?”
Still, Bosket said he doesn’t regret taking loans.
“It’ll be worth it. If you think about, it pays for itself, an education, after you get out of school,” he said. “I just hope that what I’m studying will pay enough that I won’t have to struggle too much to repay the loans and whatever else I have to pay.”
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