How Families End Up With Massive Student Loan Debt

Parents Forum
101

LOL, re: everyone can commute. The ONLY college accessible from my home without a PLANE ride is a 2-yr CC that offers a handful of vocational degrees and a few gen eds. Our kids can’t get a 4 year degree without the “sleep away” experience! There isn’t really even a DE program available to our kids. I know we’re unusual but remember, everyone is not in the same circumstances.

Oh, and at 53 I’m still paying my law school debt (graduated at 30). I made a dumb decision years ago to pay slowly, the interest rates were high, and then life caught up with me and for a long time I couldn’t pay more. Or rather I chose to spend on other things, such as 13 years of private school tuition for my son, orthodontics, vacations, moving to Hawaii, fantastic food, gadgets. So I’ve made my little payments every month, tried to pay more principal when I could, and it doesn’t affect my life much, except that I’ve paid about a bazillion dollars in interest. But I’ve had a good life and have no regrets about getting a law degree or taking out the loans. I love my work almost every day.

102

Was talking with a neighbor the other day who helped some of his clients move to another state at least in part because of the cost of college there vs here.

If an affordable college was a high family priority, that family wouldn’t move to an island.

103

$80,000 total debt for undergraduate is a considerable amount. Taking on that much debt may force the student to be more careerist than s/he may otherwise be (i.e. choose major and other college activities mainly for the purpose of securing a highly paid job after graduating, even if that is not his/her main interest). The student’s spending habits can also be a factor – someone who is not frugal is more likely to have difficulty paying off that debt (and high income families who cannot afford the family contribution expected by the super-financial-aid schools may not have raised the kids to have frugal spending habits).

Also, that much student loan debt generally means parental co-signing.

104

I think the person that questioned the numbers of commuters probably didn’t realize that the bulk of college students are in CC.

Yes there are states where there is not a commuting 4 year school option.

The elite colleges are more accessible to high stat poorer kids compared to the 1950’s where pretty much only the elite went there…

Anyone that has listened to the history of how debt has evolved in the last 120 years in the US. Some parents have saved for their child to attend an expensive school. Some parents have put $$ into a college savings plan or other investment vehicle. Some are cash-flowing. Some need their student to work to help pay. Some students have good merit scholarships. In some states there are more lower cost options than other states.

I know families with a large number of children (many consider large at least four; know families with 7 or 8 kids). So many of these students have to finance more of their own schooling outside of grants or merit. Some may finance more of their kids’ college and have little saved for retirement. I have two kids, and would have had more limited educational/extracurricular opportunities if we had 3 kids. I think one family with 3 older kids and then 4 very young kids have some grandparents helping with the junior/senior year of colleges away (after attending local university for the first two years).

105

@ucbalumnus - yes I get all of that. I am not saying debt is a good thing, or a desirable thing. I am saying that for many of us it was a necessary thing. And I believe many of us used that debt to have an education that we would not have been able to afford without the loans. And I, for one, am grateful that I did not have to miss out on anything because my parents had nothing saved for college. I took out the loans, I graduated, I work. It will be paid off, eventually.

106

<<<
There are only 9 UCs, so many more parts of California are not within commuting range of one of them, and relatively high selectivity with holistic admission reading means that even those who do live near one of them usually cannot count on being admitted to that one.
<<<

yes, but I was including the CSUs and Cal Polys when I was saying that the sprinkling was designed so that many/most residents could commute to college. There is a UC, a cal poly, or a CSU near most of the population in Calif.

In response to your UC selectivity mention…when these schools were started, selectivity was extremely modest. It barely existed. So, again, all these schools were sprinkled so that most residents could go to one of them.

When I was 17 and applying, if you had a 3.0 average, you were essentially guaranteed admittance into a UC. lol There was no hand-wringing about getting into UCLA or Berkeley. I can’t remember what the minimum test score req’ts were, but I vaguely remember that we had to take both the ACT and SAT. I don’t know if that’s totally right, but I remember taking both to apply to a UC. The UCs were known to be the premed schools. Virtually no one who was premed went to a CSU, if they wanted to be taken seriously. USC was also a premed school. The CSUs were more of the “occupational schools”. Many future engineers, teachers, nurses, CPAs, etc, went to CSUs.

107

The thresholds then were an approximation of making 1/8 of the high school graduates eligible to attend UCs as a frosh (1/3 for CSU). There was probably less high school grade inflation then, so 3.0 then was probably equivalent to something higher now. UC eligibility was also a sliding scale of GPA and SAT or ACT score (as low as 2.8 with a perfect SAT or ACT score, as high as 3.3 with the lowest possible SAT or ACT score). Three achievement (now SAT subject) tests were also used (including for placement purposes one students got to college).

It is true that many of the UC campuses (though not UCB and UCLA, particularly in their most popular majors) back in the 1980s admitted almost all applicants that met the eligibility criteria described above. But even then, as you note, the UCs and CSUs emphasized different goals. As is the case now, the CSUs were dominated by pre-professional majors, while the UCs tended to have more liberal arts majors and research activity.

All of them were inexpensive enough, and jobs for high school graduates paid enough relative to living costs, so that there were many students who supported themselves living on their own by working, and have some money left over to pay the small tuition and books costs at a UC or CSU. Of course, many did live with their parents to save money, but it was more possible back then to live on one’s own if one’s parents did not live in reasonable commuting distance of one that had your major.

Now, of course, California’s state government budget spends a lot more to warehouse the failures of the past (prisons), reducing the amount available to educate for the future.

108

The following site offers searchable data, from Dept. of Education and CDS sources, on student debt.
http://www.college-insight.org

Here are results I get for average debt of graduates at public and private 4 year institutions in each of the states and the District of Columbia:

Average debt of graduates … Name
$36,300 Connecticut - Private nonprofit, 4-year or above
$34,271 Rhode Island - Private nonprofit, 4-year or above
$34,170 New Hampshire - Public, 4-year or above
$33,900 South Dakota - Private nonprofit, 4-year or above
$33,305 Minnesota - Private nonprofit, 4-year or above
$33,135 Nebraska - Private nonprofit, 4-year or above
$32,659 Pennsylvania - Public, 4-year or above
$32,571 Delaware - Public, 4-year or above
$32,432 Michigan - Private nonprofit, 4-year or above
$32,338 Pennsylvania - Private nonprofit, 4-year or above
$32,101 Ohio - Private nonprofit, 4-year or above
$31,799 Texas - Private nonprofit, 4-year or above
$31,487 Iowa - Private nonprofit, 4-year or above
$31,449 Maine - Public, 4-year or above
$31,244 Wisconsin - Private nonprofit, 4-year or above
$30,773 Georgia - Private nonprofit, 4-year or above
$30,397 New York - Private nonprofit, 4-year or above
$30,233 Maryland - Private nonprofit, 4-year or above
$30,058 Indiana - Private nonprofit, 4-year or above
$30,044 Florida - Private nonprofit, 4-year or above
$29,773 Washington - Private nonprofit, 4-year or above
$29,691 Mississippi - Private nonprofit, 4-year or above
$29,657 Minnesota - Public, 4-year or above
$29,467 Alaska - Public, 4-year or above
$29,407 South Carolina - Public, 4-year or above
$29,388 Massachusetts - Private nonprofit, 4-year or above
$29,241 New Jersey - Private nonprofit, 4-year or above
$29,092 Michigan - Public, 4-year or above
$28,994 Alabama - Public, 4-year or above
$28,875 Rhode Island - Public, 4-year or above
$28,851 Illinois - Private nonprofit, 4-year or above
$28,779 New Hampshire - Private nonprofit, 4-year or above
$28,660 Oklahoma - Private nonprofit, 4-year or above
$28,506 Colorado - Private nonprofit, 4-year or above
$28,267 Alabama - Private nonprofit, 4-year or above
$28,260 Illinois - Public, 4-year or above
$28,191 California - Private nonprofit, 4-year or above
$28,035 Oregon - Private nonprofit, 4-year or above
$28,030 Montana - Public, 4-year or above
$28,010 Ohio - Public, 4-year or above
$27,997 West Virginia - Private nonprofit, 4-year or above
$27,914 New Jersey - Public, 4-year or above
$27,886 Vermont - Public, 4-year or above
$27,878 Indiana - Public, 4-year or above
$27,829 South Carolina - Private nonprofit, 4-year or above
$27,775 Louisiana - Private nonprofit, 4-year or above
$27,695 Iowa - Public, 4-year or above
$27,588 Utah - Private nonprofit, 4-year or above
$27,348 Massachusetts - Public, 4-year or above
$27,264 West Virginia - Public, 4-year or above
$27,222 Mississippi - Public, 4-year or above
$27,094 Wisconsin - Public, 4-year or above
$27,051 North Carolina - Private nonprofit, 4-year or above
$27,023 Kansas - Private nonprofit, 4-year or above
$26,385 Idaho - Public, 4-year or above
$26,380 Virginia - Public, 4-year or above
$26,368 Nevada - Private nonprofit, 4-year or above
$26,281 Maine - Private nonprofit, 4-year or above
$26,266 Tennessee - Private nonprofit, 4-year or above
$26,087 Kansas - Public, 4-year or above
$25,940 Missouri - Private nonprofit, 4-year or above
$25,875 Vermont - Private nonprofit, 4-year or above
$25,700 Arkansas - Private nonprofit, 4-year or above
$25,348 Connecticut - Public, 4-year or above
$25,257 Arkansas - Public, 4-year or above
$25,256 New Mexico - Private nonprofit, 4-year or above
$25,156 Maryland - Public, 4-year or above
$25,036 Kentucky - Public, 4-year or above
$24,708 Montana - Private nonprofit, 4-year or above
$24,503 Virginia - Private nonprofit, 4-year or above
$24,353 Missouri - Public, 4-year or above
$24,248 Oregon - Public, 4-year or above
$24,181 South Dakota - Public, 4-year or above
$24,130 Nebraska - Public, 4-year or above
$24,016 Tennessee - Public, 4-year or above
$23,937 Colorado - Public, 4-year or above
$23,860 Texas - Public, 4-year or above
$23,440 North Carolina - Public, 4-year or above
$23,267 Kentucky - Private nonprofit, 4-year or above
$22,879 Wyoming - Public, 4-year or above
$22,833 Georgia - Public, 4-year or above
$22,629 Washington - Public, 4-year or above
$22,165 Arizona - Public, 4-year or above
$22,065 Florida - Public, 4-year or above
$22,048 District of Columbia - Private nonprofit, 4-year or above
$21,979 Hawaii - Public, 4-year or above
$21,720 New York - Public, 4-year or above
$21,640 Louisiana - Public, 4-year or above
$21,577 Nevada - Public, 4-year or above
$20,750 Oklahoma - Public, 4-year or above
$18,473 New Mexico - Public, 4-year or above
$18,066 California - Public, 4-year or above
$18,065 Utah - Public, 4-year or above
$9,757 Alaska - Private nonprofit, 4-year or above

109

Percent of graduates with debt … Name
0.82 South Dakota - Private nonprofit, 4-year or above
0.79 New Hampshire - Public, 4-year or above
0.79 Kansas - Private nonprofit, 4-year or above
0.78 Wisconsin - Private nonprofit, 4-year or above
0.78 Rhode Island - Public, 4-year or above
0.77 Iowa - Private nonprofit, 4-year or above
0.77 Maine - Public, 4-year or above
0.77 New Mexico - Private nonprofit, 4-year or above
0.75 West Virginia - Private nonprofit, 4-year or above
0.75 Montana - Private nonprofit, 4-year or above
0.74 Pennsylvania - Public, 4-year or above
0.74 Ohio - Private nonprofit, 4-year or above
0.74 Massachusetts - Public, 4-year or above
0.72 Minnesota - Private nonprofit, 4-year or above
0.72 Michigan - Private nonprofit, 4-year or above
0.72 Illinois - Private nonprofit, 4-year or above
0.7 Nebraska - Private nonprofit, 4-year or above
0.7 Oregon - Private nonprofit, 4-year or above
0.7 New Jersey - Public, 4-year or above
0.7 West Virginia - Public, 4-year or above
0.7 South Dakota - Public, 4-year or above
0.69 Washington - Private nonprofit, 4-year or above
0.69 Minnesota - Public, 4-year or above
0.69 Virginia - Private nonprofit, 4-year or above
0.69 Kentucky - Private nonprofit, 4-year or above
0.68 Pennsylvania - Private nonprofit, 4-year or above
0.68 Indiana - Private nonprofit, 4-year or above
0.68 New Hampshire - Private nonprofit, 4-year or above
0.68 Idaho - Public, 4-year or above
0.67 Illinois - Public, 4-year or above
0.67 South Carolina - Private nonprofit, 4-year or above
0.67 Wisconsin - Public, 4-year or above
0.67 Missouri - Public, 4-year or above
0.65 New York - Private nonprofit, 4-year or above
0.65 New Jersey - Private nonprofit, 4-year or above
0.65 Montana - Public, 4-year or above
0.65 Ohio - Public, 4-year or above
0.65 Vermont - Public, 4-year or above
0.65 Connecticut - Public, 4-year or above
0.64 Iowa - Public, 4-year or above
0.63 Connecticut - Private nonprofit, 4-year or above
0.63 Texas - Private nonprofit, 4-year or above
0.63 Georgia - Private nonprofit, 4-year or above
0.63 Maryland - Private nonprofit, 4-year or above
0.63 Florida - Private nonprofit, 4-year or above
0.63 Alabama - Private nonprofit, 4-year or above
0.63 Kansas - Public, 4-year or above
0.62 Rhode Island - Private nonprofit, 4-year or above
0.62 Delaware - Public, 4-year or above
0.62 North Carolina - Private nonprofit, 4-year or above
0.61 Mississippi - Private nonprofit, 4-year or above
0.61 Massachusetts - Private nonprofit, 4-year or above
0.61 Michigan - Public, 4-year or above
0.61 North Carolina - Public, 4-year or above
0.61 Georgia - Public, 4-year or above
0.6 California - Private nonprofit, 4-year or above
0.6 Indiana - Public, 4-year or above
0.6 Vermont - Private nonprofit, 4-year or above
0.59 Louisiana - Private nonprofit, 4-year or above
0.59 Nebraska - Public, 4-year or above
0.58 Maryland - Public, 4-year or above
0.58 Tennessee - Public, 4-year or above
0.58 Texas - Public, 4-year or above
0.57 South Carolina - Public, 4-year or above
0.57 Oklahoma - Private nonprofit, 4-year or above
0.57 Mississippi - Public, 4-year or above
0.57 Missouri - Private nonprofit, 4-year or above
0.57 Kentucky - Public, 4-year or above
0.56 Virginia - Public, 4-year or above
0.56 Oregon - Public, 4-year or above
0.56 Alaska - Private nonprofit, 4-year or above
0.55 Tennessee - Private nonprofit, 4-year or above
0.55 Arkansas - Private nonprofit, 4-year or above
0.55 Colorado - Public, 4-year or above
0.55 Washington - Public, 4-year or above
0.55 New York - Public, 4-year or above
0.54 Colorado - Private nonprofit, 4-year or above
0.54 Utah - Private nonprofit, 4-year or above
0.54 Arkansas - Public, 4-year or above
0.54 Arizona - Public, 4-year or above
0.54 New Mexico - Public, 4-year or above
0.53 Alabama - Public, 4-year or above
0.53 California - Public, 4-year or above
0.52 District of Columbia - Private nonprofit, 4-year or above
0.52 Oklahoma - Public, 4-year or above
0.51 Florida - Public, 4-year or above
0.51 Utah - Public, 4-year or above
0.5 Nevada - Private nonprofit, 4-year or above
0.49 Alaska - Public, 4-year or above
0.48 Wyoming - Public, 4-year or above
0.46 Maine - Private nonprofit, 4-year or above
0.46 Hawaii - Public, 4-year or above
0.45 Louisiana - Public, 4-year or above
0.43 Nevada - Public, 4-year or above

110

If the average income of parents involved in college X is $250,000, it stands to reason their graduates will have less debt even with a 60k price tag than those of college Y, whose graduates’ parents earn on average 60k per year, even if the cost is under 20k.

Would be careful about reading too much into those numbers. Picking a New York school because of lower debt among its graduates doesn’t guarantee anything to you or me.

111

National Averages
(source: http://www.college-insight.org)

Type … % of grads with debt … avg debt
public … 60% … $25,043
private … 65% … $29,708

“public” = Public institutions, 4-year or above, average for the entire USA
“private” = Private non-profit institutions, 4-year or above, average for the entire USA

112

T10 USNWR National Universities
(source: http://www.college-insight.org)

% of graduates with debt … Average debt of graduates …Name
24% $5,552 Princeton University
26% $12,560 Harvard University
16% $13,009 Yale University
N/A N/A Columbia University in the City of New York
23% $16,640 Stanford University
43% $23,978 University of Chicago
41% $17,891 Massachusetts Institute of Technology
37% $18,456 Duke University
36% $19,798 University of Pennsylvania
40% $15,010 California Institute of Technology

32% $15,877 AVERAGE

113

T10 USNWR National LACs
(source: http://www.college-insight.org)

% of graduates with debt … Average debt of graduates …Name
29% $12,474 Williams College
29% $15,466 Amherst College
36% $19,338 Swarthmore College
49% $14,030 Wellesley College
31% $21,292 Bowdoin College
33% $13,441 Pomona College
46% $17,715 Middlebury College
45% $18,000 Carleton College
27% $23,273 Claremont McKenna College
29% $15,000 Haverford College

35% $17,003 AVERAGE

114

“Public Ivies”
(source: http://www.college-insight.org)
https://en.wikipedia.org/wiki/Public_Ivy

%of graduates with debt … Average debt of graduates … Name
43% $17,468.00 University of California-Berkeley
49% $20,229.00 University of California-Los Angeles
47% $27,163.00 University of Michigan-Ann Arbor
35% $21,815.00 University of Virginia-Main Campus
39% $17,602.00 University of North Carolina at Chapel Hill
38% $24,400.00 College of William and Mary
50% $25,300.00 The University of Texas at Austin
63% $27,276.00 University of Vermont
54% $27,181.00 Miami University-Oxford

46% $23,159.33 AVERAGE

115

For Michigan, around 63% of college graduates with debt. But for UMich, it is only 44% (for class of 2011). The main difference between UMich and other colleges in Michigan is UMich would meet the need of in state students. Also, they pledge to reduce student debt by offering more grant. Considering the recovery of economy in Michigan in the last couple years from horrible economy situation (among the worse in the country for unemployment rate, foreclosure, etc), hopefully these numbers will improve in the near future.

http://www.usatoday.com/story/news/nation/2013/07/05/colleges-lowering-student-loan-debt-financial-aid/2493227/
http://www.freep.com/story/news/local/michigan/2014/11/14/mich-average-college-loan-debt-rises/19002611/

116

I don’t see how it’s useful to have the average debt for public colleges with the percent of graduates with debt from private colleges. The cost of public vs private is very different, and aid varies a lot.

Tuition at our NYS community colleges is ~$4k/year and at the 4-year SUNYs it’s ~$8k. (Dorming increases costs to ~$20k/year). So students who commute to our public schools can graduate with not much debt. Low income students who get the state tuition grant, Pell, and student loans can graduate without a lot of debt if they work summers and during the school year.

Private colleges are another story. NYS is home to NYU which costs $60k+/year and is notoriously stingy with aid. Maybe the percent of students who graduate from NYS private colleges is .65, but I’d wager the average debt is much more than $22k. People who don’t read the tables carefully may not catch that they’re talking about different things.

117

It makes sense that PA. would show up towards the top of the list in debt of grads of public colleges. This is because U. Pitt and Penn State consistently are the top 2 most expensive public universities in the US. Penn State in-state tuition is $21K a year for many majors, and they do not offer much aid, even for in-state students.

The first $19K of debt is not so bad, because it is federally subsidized Stafford loans that can be paid back over 10 years. The next $8K of debt is typically unsubsidized Staffords, which still do not have high interest rates. Some students are offered Perkins loans. However, after those amounts, the debt becomes much much more expensive. In addition, some loans have large up-front fees.

118

I doubt that the numbers above include private loans, home equity and 401K loans that the parents take to fund college education for their children. The real situation is probably much worse than the official statistics indicates.

119

^ These are Department of Education (or CDS) numbers, as compiled by the source I cited.
Of course, they are averages. For any given student: YMMV.
I think you’d be right to suggest that these numbers have limited value for any given individual, who needs to look for the best opportunities (or ROI) in light of his or her personal circumstances.

Numbers like these may have value if we approach student debt as a kind of “public health” problem.
The good citizens of Utah seem to be doing a better job of managing the problem than Pennsylvanians.
About 2.5X more students attend public 4y colleges than private 4y colleges, so I think the greatest collective public benefit may come by pressuring governments to emulate the best practices of certain states such as Utah (or CA, or Nevada).

120

Such as fund public higher education? These days, the only real publics in PA are the (small, somewhat limited) PASSHE schools. PSU, Pitt, and Temple are essentially privates that receive some government funding (akin to Cornell’s contract colleges).

Yet many people also dislike tax increases, oddly enough.