The
higher-education affordability movement was triggered in part by concerns that
students are digging themselves into a lifelong hole of debt by taking out
loans to finance their studies. However, a new survey shows that hole may be
fairly manageable for most students.
OnCampus
Research, part of the NACS subsidiary indiCo, asked students about their
current levels of loan debt and other financial matters. Overall, 39% of
student respondents said they had accumulated no debt at all toward their
education so far.
Students
are more likely to take out loans in their upperclassman years after exhausting
other sources of money. To compare, 46% of first-year students said they were
debt-free while only 30% of fourth-year students could say the same. Many graduate
students, despite facing higher tuition costs and possible debt left from their
bachelor’s studies, are doing all right; 39% of them currently have zero debt
from student loans.
Among
students who have borrowed for their education, more than half are deferring
payments until they graduate and can get a full-time job. The rest are paying
at least a little while they’re still in school.
However, the
amount of debt that most students are shouldering appears to be within
acceptable boundaries, contrary to numerous news reports about a debt “crisis.”
The rule of thumb, according to the federal Consumer Financial Protection Bureau, is that a student’s total loan debt should not exceed the annual salary
the student could reasonably expect to earn in their particular field in the
first year after graduation.
About a
quarter of all students say they have less than $10,000 in educational debt and
21% have $10,000-$30,000. Only 6% have accumulated $50,000 or more in
student-loan debt at this point and some of those are working on degrees in
high-paying fields such as medicine, law, or engineering.
