Average debt up again for new college grads

<p>

</p>

<p>Keep in mind that the non-dischargeability of all student loan debt including private loans was only put into place as a result of the 2005 “Bankruptcy Abuse Act”. Before that, only government or loans made by non-profit institutions were non-dischargeable in bankruptcy. And before 1976, any education loans…government/non-profit provided or otherwise was dischargeable in bankruptcy period. </p>

<p>Hence, the current student loan crisis is worse in many ways than what I or moreso…college students in some of the parents’ and prior generations faced.</p>

<br>

<br>

<p>I think that it would be hard to find the numbers that you’re looking
for New Hampshire. New Hampshire does border Massachusetts, a state
with a lot of very good universities. The population centers for
NH are more towards the Southern part of the state and many schools
in MA are actually closer (in terms of time) than UNH. Most of the
NH people that I know send their kids to schools in MA rather than
schools in NH.</p>

<p>Taxes in NH are quite low unless you own an expensive home. This can
allow parents to save up for college if you’re in the position of a
good income and an inexpensive house. Of course there are lots of
people that spend the tax savings on consumption.</p>

<p>"considering the widespread perception among upper/upper-middle class neighbors of my Hawaii relatives that its state system is widely considered “schools of last resort” and “academically subpar” "</p>

<p>You live in NY, you have relatives in Hawaii and yet you know the views of their neighbors enough to draw a general conclusion about what upper middle class people in Hawaii think? Is that common for most people to know the views of significant numbers of their cousins’ neighbors?</p>

<p>“The impact of education debt is grossly hyped. Reasonable amounts of debt carry a reasonable payment load. The problem is really about having poor job possibilities upon graduation.” - Xiggi</p>

<p>We’ve got to get his economy back to rolling.</p>

<p>zenkoan–who cares if it is dischargable or not, that is not the point. You see article after article and thread after thread about the “skyrocketing costs” of college and the point it, costs are NOT going up that fast in relation to salaries and the costs of other things. Everyone uses inflation and “average income” to compare the rise in cost and it’s just pointless to use those numbers without quantifying what they are based on. I’ve posted study after study on various threads showing that the rise in college costs mirrors the rise in salaries, job for job, over the past 40 years+. That is the point. Student loan debt compared to starting salary out of college has actually DECREASED in the past 30 years when adjusted for current dollars.</p>

<p>Steve, no matter how one contextualizes the data about increases in tuition relative to salaries, the nondischargeability of student loans becomes very much “the point” to those students who graduate with five figures of debt and find they have no realistic prospects of earning enough to begin prompt repayment of that debt. When this debt begins to rapidly snowball as a result of delinquent payments, even declaring personal bankruptcy won’t eliminate that debt–unlike credit card or auto loan debt. The relationship between starting salaries and student loan debt is of limited relevance in an economy where large percentages of graduating students aren’t finding even entry-level employment. There’s nothing hyperbolic in making that observation, nor in acknowledging that college costs have been rising well ahead of inflation for years.</p>

<p>zenkoan–then they should have gone somewhere else for college. There is NO reason to take $100,000+ out for UG, EVER. Ok for medical school but no other reason, EVER. If they find themselves in a situation where they over extended themselves for college, tough cookies if they have to file bankruptcy and continue to pay off that debt. Again, the AVERAGE debt of $26,000 should NOT be an issue for anyone coming out of UG…unless they over extend themselves with car payments, rent, etc. and then, same thing, tough cookies, welcome to the world of being responsible.</p>

<p>I don’t think this thread was discussing 100K of loans for undergrad debt, a figure few would consider reasonable even under much more robust economic conditions. </p>

<p>And I’m not sure “tough cookies” suffices as either policy analysis or prescription for economically disadvantaged students trying to access higher ed. While I’m among the very fortunate who will have no indebtedness upon graduation, I’m concerned about my classmates who were less fortunate in the parent lottery, and who may wind up permanently and significantly set back by the average amount of student loan debt. We’re still years away from a healthy job market no matter who wins the election and no matter how the balance may or may not shift in Congress, because very deep holes take years to climb out of. Hoping that my classmates, who have taken on what they’ve been encouraged to think is reasonable debt, won’t have an ever-deepening personal hole to dig out of, in addition to the national one.</p>

<p>zenkoan–again, there is NO reason ANY student should have to take out loans that are not affordable to pay back. With the average starting salary for a new college grad at close to $50,000, having $26,000 in student loans is EASILY done and paid back in short order-under 5 years really. I’ve been there, done that as my DH and I both paid for our own college educations because our parents were not in a position to help. We both attended a private college, got scholarships and took out max loans. I graduated with $16,000 of debt, he had $9000 because he won a full ride scholarship for his last 2 years. His starting salary out of college was $16,000, mine was $15,500. We had ALL of our loans paid off in less than 4 years while paying for our own wedding AND saving money and buying our first house. Two kids making $100,000 combined with $50,000 in debt combined should EASILY be able to do the same today… unless they are stupid about expenses. Advantaged or disadvantaged kids are moot, the point is how much these kids are making after college.</p>

<p>Steve–again, the issue is that there are many, many more young people in need of work than there are jobs available for them. Those who get jobs at the 50K level or above, and who have the average amount of loan debt, may be able to pay back the loans on a timely basis with unwavering attention to frugality, but many others won’t find employment at that sustainable level, despite their best efforts and well-chosen majors–and these conditions won’t be changing any time soon.</p>

<p>If they don’t have a job they can defer paying back the loans. There are provisions in the federal loans for doing that but even with that, making $12/hour at Target or where ever will earn you $25,000/year, which is the same ratio of debt to income I had when I first got out of college. There ARE jobs out there, kids need to be flexible about where they move to get those jobs though…</p>

<p>I’d like to believe that there are jobs available for all young people seeking them, if they’ll only move to find them, but I’ve seen a lot of news accounts of hundreds of applicants for each entry-level job, all over the country. That’s one of the main reasons so many college grads are moving back in with their parents. But some kids don’t even have supportive families (or any families to speak of, in some cases) to whom they can return while they look for work.</p>

<p>Dug out some old papers: Tuition U of Florida 1970-71: $450 1971-72: $570 (2012-13: $6170).
COA 1970 (mine): $2000 1971: $2200 (off off campus in a mobile home) Official COA 2012-13 from school website: $20580. My projected debt would have been $4000 ($40k today?) after four years because the maximum amount for the type of loan I got was $1K/year. After 2 years ran out of money so parents found me a school they could afford. It turned out to be a very good choice.</p>

<p>I think the troubling aspects of current educational costs are not truly revealed by the dollar amount at graduation. If 50% of college students graduate without a job, I have to believe that a good portion of those kids has a larger debt load by the time they are employed with a college commensurate salary.</p>

<p>I don’t believe the lost wealth of parent borrowing via HELOC is accounted for in these numbers - nor is the lack of saving for retirement and other things foregone by parents to keep the debt as low as it is.</p>

<p>In my experience, kids and parents will say “it’s only costing X dollars per year” because they are only looking at the direct cost and not taking into account the other things that have been liquidated or eliminated to make a college choice possible - things that had value either as dollars contributed to some sort of savings or investment account or as money that would have been invested in a house or other real estate if the cost of education weren’t where it is. I don’t think the nature of the problem is such that it will burst in the same spectacular fashion as the housing industry, but unless there is job recovery on a scale that is nothing short of spectacular in this country - I do think this growing pile of debt will cripple many individuals to greater or lesser extent and collectively drag our economy down for decades to come.</p>

<p>What would the monthly payment be on $26000. Just trying to crunch the numbers in my head. Rent, Car, Car Insurance for a young kid, FOOD, Phone ,Internet which I don’t see how you can avoid, Cable TV, Medical. I’m sure I’m forgetting a bunch of other bills. Seems to me that a $26,000 debt is going to be causing a big problem. $12 an hour at Target is not going to cut it. I don’t see the job market changing for a long long time and it could get worse.</p>

<p>$26,000 at 5% interest for 10 years would be $275.77 per month.
At 8% the payments would be $315/month. (from a mortgage amortization calculator)</p>

<p>spunk61–$26K is a take home pay of roughly $1600/month depending on your tax situation. No, you won’t survive in NYC, Boston, etc. on that wage unless you have 10 roommates but there are 1000’s of places across the country where a young college grad can do just fine on that salary. Given that the average salary for a new college grad is almost double that, having $26K in student loans is not going to be an issue if you are smart about expenses.</p>

<p>Given that many new college grads throughout the country are unable to find steady work at all, and that many that do find jobs make considerably below that average figure, I’m still very worried about my contemporaries graduating with that much debt.</p>

<p>College loans are one of the worst propositions students can make today. Much better to just go to a state school.</p>

<p>TheOmniscient–except for many students here the state schools end up costing MORE then the private schools after merit aid. Between our 2 applying this year they have applied to 19 schools, 4 state schools. Of their choices, 1 state school is on the lower end of their costs, but not the lowest, the other 3 are their most expensive choices right now.</p>