Fifteen Things You Might Not Know About Student Debt
When it comes to student debt, there’s a statistic, opinion, or unusual fact about pretty much everything. Here is a small selection of the more interesting ones.
1. The Chronicle of Higher Education reports that almost 20 million Americans attend college or university each year, close to 60% of whom cover the cost with annual borrowing.
2. According to CNBC, the average college student from the graduating class of 2011 had a total of $26,600 in student loans. This represents a five percent increase from the comparative average debt in 2010.
3. Only one third of college students will graduate completely free from the burden of student loan debt repayments.
4. Students attending top ranked colleges such as Princeton University, Yale University, and Williams University graduate with an average student debt of less than $10,000.
5. According to the Federal Reserve Board of New York, some 37 million borrowers have an outstanding college debt.
6. The total outstanding student loan debt stands at more than $1 trillion. According to the Student Debt Clock, this milestone was reached at around 6.40am on May 8, 2012.
7. In 2010, the total student debt surpassed the total credit card debt. The following year, it exceeded the total owing on auto loans.
8. When repaying student loan debts, students should consider doing so via an automatic monthly payment. This will help to avoid missing a payment and many lenders will reduce the interest rate by 0.25% as a reward.
9. Looking at student debt statistics by state, it can be seen that the smallest average student debt ($17,227) is in Utah. The largest average student debt is in New Hampshire ($32,440).
10. With the costs of attending college rising twice as fast as the rate of general inflation, the Wall Street Journal proclaimed that the graduating class of 2011 was the “most indebted ever.”
11. In 2010, the College Board Advocacy & Policy Center reported that although the majority of students attending community college are likely to be eligible to receive need-based federal aid, they are less likely than students attending other kinds of institutions to file a claim.
12. Davidson College in Charlotte, North Carolina, meets 100 percent of every student’s demonstrated need with a combination of work study programs and grants; in some cases completely eliminating any presence of debt at the point of graduation.
13. The burden of student loans are thought to have contributed to the decision of 36 million Americans to drop out of college. Those who do drop out are subsequently up to four times more likely to default on student loan repayments.
14. According to Accounting Principles, with the benefit of hindsight, one third of recent graduates would have sought to better understand their financial aid options and applied for more scholarships. The same number would have started to save earlier, worked part time through college, and studied a major that was more likely to lead to a higher-paying career.
15. Bloomberg Businessweek reports that, as a result of student debt, 27% of young college borrowers move back in with parents, 40% have delayed a major purchase, and 14% have delayed getting married.
For advice how how to reduce the total amount of student debt, check out our previous post - how to make it through college without suffering a financial meltdown.