I do agree that as parents we sometimes err on the side of our children. I have to personally admit that my own upbringing and the want to provide them better, has certainly allowed education, and the premise that we will basically pay for them to attend whatever school they want (at least on the undergrad level) to be the prevailing thought in our household. Perhaps we should have not been so unencumbered and enthusiastic…I don’t know–time will tell.
We have one down (in medical residency) and two in the pipeline (one in Westwood, CA and the other in New Haven, CT), and this year will be paying a low six-figure number, out of pocket, annually, for the next three years. Even with a fair amount saved, we will be dipping into some other accounts, and realigning our budget accordingly–but thankfully , we will not be borrowing any monies. In short, supporting your children through these years, can easily take the financial tailwinds out of your sails rather quickly…
True, from an individual standpoint. However, the lists in reply #107 and #108 do hint at the different states’ policies with respect to funding and in-state financial aid at their public universities. It is no surprise that PA and DE are among the highest debt states for graduates of their public universities.
Not all debt is evil. I graduated in 1990 with a $20,000 loan. My first job paid $30k and I was able to pay off the loan in 5 years.
A while back there was an article in the WSJ about Silicon Valley techies who graduated with $100k loans. They were able to pay it all back within 5-10 years because starting salaries in tech are now >$100k.
The rule is don’t owe more than your first year salary. I know of English majors whose starting salary is $36k, so even English majors can borrow up to that amount and can reasonably expect to pay it off.
The book Debt-Free-U by UMass graduate Zac Bissonnette (excellent book by the way) said something very true that every parent should pay heed: unless you are wealthy, don’t deplete your retirement fund to help pay for your kids’ college. Your kid should pay off the loan entirely by him/herself. You have precious few years left to earn more before you retire, but your kid has his whole life ahead of him/her to pay off that loan. But first, make sure your kid understands the financial ramification of loans vs. future earnings. A lesson in personal finance in HS is crucial. Follow the rule of not borrowing more than the first year of expected earning. Go on Payscale.com to research starting and mid career salary for his/her intended major, and go to a college that makes the best financial sense for him/her.
Note that, in some cases, the good in-state financial aid at the flagship (e.g. University of Virginia, University of Michigan) seems not to be replicated elsewhere in the states’ universities, since the average debt levels in those states are higher than the national level. Some states offer their state universities at lower cost for some out-of-state students (either lower list price like Minnesota or merit scholarships like Alabama) but may not have the money for their own in-state lower income students, based on their higher average debt levels.
That doesn’t take room and board into account, though. I’m going to a public with lower tuition than that (this upcoming semester is $3,400), and I still have to pay $800 a month for rent, buy all the food I eat, and pay for all the little miscellaneous things I need. I am looking to get a job, but I do have student loans to help cover rent and stuff. Granted, I did do two years of community college without taking out any loans, and my loans for university are federal only, so I shouldn’t have too much debt (good, because I want to go to graduate school). Still, my degree is, in terms of actual costs, more than $36.500 just for the two years of university.
arranged by USNWR rank
(I pulled the 10 highest-ranking state schools for which I could find debt numbers on College Insight)
% of graduates with debt … Average debt of graduates … Name
46% $25,821 Michigan State University
53% $23,782 Florida State University
57% $23,532 North Carolina State University at Raleigh
62% $29,898 Iowa State
54% $23,726 Colorado State
55% $21,137 Arizona State University
58% $26,710 George Mason
60% $22,831 Oregon State
59% $23,952 Washington State - Pullman
71% $29,121 Illinois State
58% $25,051 AVERAGE
Compare to “Public Ivy” numbers cited above:
46% $23,159.33 AVERAGE
Percent of graduates with debt … Average debt of graduates … Name
45% $25,254 University of Maryland-College Park
66% $35,430 Pennsylvania State University-Main Campus
62% $32,571 University of Delaware
64% $24,284 Rutgers University-New Brunswick
66% $25,741 State University of New York at New Paltz
62% $24,600 University of Connecticut
63% $27,276 University of Vermont
76% $36,064 University of New Hampshire-Main Campus
78% $34,389 University of Maine
70% $28,999 University of Massachusetts Amherst
77% $31,141 University of Rhode Island
66% $29,614 AVERAGE
Percent of graduates with debt … Average debt of graduates … Name
58% $37,694 Boston University
48% $30,881 George Washington University
50% $30,688 New York University
65% $29,914 University of Rochester
44% $27,827 University of Miami
61% $38,628 Fordham University
67% $33,455 Syracuse University
91% $24,990 Clark University
83% $27,835 Clarkson University
80% $26,119 Duquesne University
65% $30,803 AVERAGE
Sticker price isn’t necessarily the best indicator of high debt levels. Among the schools I’ve compared above, the lowest debt levels (both in terms of average amounts and % of students) are at the USNWR top 10 national universities and top 10 national LACs (which all have very high sticker prices).
Regional effects (possibly including cost of living) may be as important as the public v. private distinction. Debt levels at state flagships in the NE seem to be very nearly as high as debt levels at private (not-full-need) universities in the NE (although I’ve focused only on schools in approximately the USNWR top 100).
Caveat: these are very small sample sets.
However, assuming they are at all representative, they suggest to me that average debt levels (if not “massive” debt levels) may have at least as much to do with regional COL and public policy as they do with irrational personal choices. Obviously, choosing a more prestigious and expensive college, despite inadequate FA, is a good formula for “massive” debt … but it may be the case that relatively few people do that. We’d have to define what we mean by “massive” debt, then figure out how to expose numbers and patterns of those borrowers.
Room and board at Indiana is about 11k. At Case it’s about 13k. 16k at Columbia maybe?
I suspect it has more to do with focus. Changing majors can add a year, and in many cases merit aid is good for 8 semesters only, so that last, tantalizing year is full freight. If it goes to two years, I suspect the temptation just to borrow heavily and get it done is hard to resist. Bang, an extra 30k or 40k of debt for a general studies degree.
If your parents went to college, they probably learned some things about aid and scholarships and may put a little more pressure to finish in 4. " I know you want to change majors, but finish this degree first so you can have a way to pay for another." Also, statistically, they’re more likely to be able to help weather a couple bonus semesters, financially at least. Then they can start pressuring about Grandkids
What is likely the case is that students and families do not consider the cost, financial aid, and scholarships up front when making application lists. Then all of their choices in April are too expensive and require high debt. You can see it in the search and selection section, where most students asking for colleges to apply do make no mention of cost constraints, or assume (without having explicitly asked) that their parents can afford all of their choices. It was also only recently that there was some financial aid transparency through net price calculators, but there is still relatively little information on how difficult many competitive merit scholarships are to get.
@tk21769, you see wide variation in debt of grads of the flagships in the Northeast, which means that sticker price & aid (driven by state support) and possibly more kids splurging on OOS are the main drivers. The Northeast merely is a region where state support for publics has traditionally been weaker than in some other regions. Happy Valley isn’t exactly a high-cost locale. I don’t believe NH and Maine are either.
And duh, the schools that provide great fin aid do not saddle as many of their grads with much debt. I think everyone reading this thread knows that.
Of the 10 Northeastern state universities I listed above, Rutgers has the lowest average debt-per-borrower at graduation ($24,284). The University of NH has the highest in that group ($36,064). The University of Maine has the 3rd highest ($34,389), as well as the highest percentage of borrowers. Yet, look at their costs and aid:
School … In State Tuition+R+B (2014-15) … OOS T+R+B …Average % of need met
Rutgers … $25,562 … $40,340 … 57%
UNH … $26,912 … $39,892 … 76%
UMaine … $19,900 … $37,780 … 78%
Source: USNWR (“Cost & Financial Aid” entries)
Delaware has a very high out of state enrollment. So their cost/debt is skewed higher than what you’d find at a typical State U filled with in-staters paying the lower price.
