How much debt is too much debt?
There is an interesting article in today’s Inside Higher Ed on Debt, Jobs, Diversity and Who Gets In: A Survey of Admissions Directors. The article focuses on the debt part of the survey and highlights that “a plurality of college admissions directors … indicated that current average loan volume for undergraduates is reasonable.” This brings up an interesting question – how much debt is too much? Should students be asked to take on any debt to pay for college?
Over the past year, there has been much discussion about the growth in college debt – particularly because student loan debt swelled above credit card debt for the first time last year (student loan debt was $867 billion compared to $704 billion in credit card debt). While the majority of the growth in total student loan debt is the result of more students going to college, there was an increase in the average debt for students at both public and private institutions.
How does CC compare to the national numbers? The average debt for U.S. students graduating in 2010 was $25,250, up 5 percent from the previous year. Loans at Colorado College were significantly lower than the national average, with our graduating seniors (including only those who have debt) having an average debt of $18,349. While this is a large debt for a young person and we wish it could be lower, is it too much? The annual wage premium to attending college is around $23,000 with a college grad making $57,000 compared to a high school grad making on average $34,000. So the return to a college degree for ONE YEAR is greater than the average CC graduate’s debt. In fact, 2/3 of all college students in the US graduate with less debt than the annual wage premium from getting a college degree.
- 3rd October 2012 -
- Posted by Jill in General