What’s the Average College Student Loan Debt?
Student loans has become far more popular than popular as more and more people go back to school and students plan to stay longer to graduate with higher degree. So the average student loans debt has risen.
How much in student loan debt average college student graduate with or owe?
Few years back, CollegeBoard published the report that found that for undergraduate Bachelor of Arts degree, the average college student loan is around $18,500 by the time they graduate. If you go to private for profit school, your loan debt will average around $24,000, for private non-profit it will be $16,000 and for public college or university the loan averages around $10,000. But you have to take into consideration that each student is different and so is their financial needs; some may borrow more than others and some might not need a loan at all due to scholarships or parents paying for the college tuition fees and other expenses. You should at least have a four year degree to be able to make enough to pay off all the debts within few years.
More students are borrowing. According to NCES, National Center for Education Statistics, by the time students graduate, nearly two-thirds of them at four-year colleges and universities have a student loan debt (66.4% in 2004). About a decade year before that, it was less than half who had student loans to pay back. Also over that past decade, the debt levels for graduating seniors with student loans more than doubled from $9,250 to $19,200, which is an 108% increase. That’s a lot of money they owe. One reason was the inflation where the price for daily living expenses increased.
What type of student borrows all these loans? According to NCES during that time period, the Pell Grant recipients were more likely to have student loans, and to borrow more, than other students. Of Pell recipients who got their Bachelor’s degrees in 2004, 88.5% had student loans, compared to 51.7% of non-Pell recipients. It is no surprise though, student who got Pell Grants are because their income family household income were low; so they needed more money to supplement their education cost that was getting expensive. On the other hand, the non-Pell Grant recipients didn’t get the grant because their income were higher than average people. Undergrad is different that graduate school, and maybe less expensive so the graduate students may borrow more.
How come there are so many private student loans and not enough government financial aids for college? During year 2006, number of private loan companies became larger an started to comprise 20% of total education loan dollars, including undergraduate, graduate, and parent loans. Ten years before that, the private loans comprised only 5% of total education loan dollars in the United States.
What type of student default on their loans? Borrowers who do not complete their degrees are 10 times as likely to default on their loans and twice as likely to be unemployed as borrowers who complete their degrees. It is not because they don’t like to work; they worked while in school too. Three out of four full-time college students have jobs, and nearly half of them (46%) work more than 25 hours a week.
Can I still pursue higher education such as master degree and doctorate if I have undergraduate student loans to pay? You should, but see the statistics: People with undergraduate debt are much less likely to get a PhD that those without undergraduate debt. Nearly three fourths (72%) of U.S. doctorate recipients who earned their degrees between July 1, 2003, and June 30, 2004 had zero undergraduate debt. Maybe most of them got the scholarships and grants.
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