Last year's college graduates were immediately saddled with an average of $24,000 in debt upon leaving their undergraduate careers behind, an increase of 6 percent from the previous year, according to a recent report from the Institute for College Access and Success.
The institute's report, titled "Student Debt and the Class of 2009," also shows that the unemployment rate for graduates was 8.7 percent in 2009, an increase from 5.8 percent in 2008 and the highest annual rate on record.
Members of the University's class of 2009 had an average total debt of $19,939, and for those students who took need-based loans specifically, $15,571, said Scott Miller, associate director of student financial services at the University, The previous year, the average debt was $19,016 and $14,849 for students who took need-based loans, he said. The amount of debt at the University has probably gone up by about the same percentage each year, he added.
Both the institute and the University rely on data collected from the Common Data Set, a self-reported survey from colleges nationwide. Matt Reed, the project's program director, attributed the increase in student debt to college costs rising without financial aid and grants keeping up.
"And it's not just tuition," Reed said. "There are other costs such as room and board, living expenses, books and supplies."
With such significant debt to pay off, even students who managed to find employment right away may have difficulty with their loans. But with the rising unemployment level, it seems likely that the number of students who have run into trouble with dealing with their debt has increased.
"Students who come out of school with thousands of dollars of debt have to start making payments on that about six months after graduation," Reed said. That "may affect their decisions about other life choices such as when to get married, have a family, buy a house, go to graduate school."
As a result, opting for federal assistant rather than taking out private loans likely will be more advantageous, Reed said.
"The main thing is that we're concerned about rising debt level," he said. "And sometimes the question is what can be done about that. The answer is that colleges, states and the federal government all need to emphasize federal grants and aid."
Miller said the University has a policy of awarding grants instead of loans to low-income students who have a family income that is within 200 percent of national poverty guidelines. Additionally, the University uses a loan cap to keep student debt down. When students reach this cap, any money that would have been provided through need-based financial aid is awarded in grant aid.
University students with loans also should make a point to keep in mind how much they are borrowing, Miller said. By logging on to the National Student Loan Data System and entering their pin numbers from their Free Application for Federal Student Aid, students can enter a secure site to pull up their entire loan histories, including private loans.
Moreover, Miller said, although loans are offered are at the maximum amount, students have the ability to borrow less using the Student Information System.
In addition, the Office of Financial Aid offers counselor services to students in need of guidance about their financial situations.
"We have two people on our staff that are accredited financial counselors, and that's part of our responsibility to offer that service," Miller said.
Miller encouraged students to take advantage of what options they have to reduce their debt.
"Students need to be looking at their budgets and they need to create and follow a budget," he said. "If they can afford to go on less, [they can] take out a lower loan. There are some students that need that amount, but there are others [who] can at least reduce it. It just goes back to the axiom 'just take what you need."
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