EEUU: Survey: Recent La. graduates facing debt

EEUU: Survey: Recent La. graduates facing debt
49 percent of state students owe $18,000 on average

As the Postsecondary Education Review Commission sends out a recommendation that Louisiana's colleges and universities hike tuition, a national survey shows that about half of last year's graduates left campus facing significant debt in student loans.

The Project on Student Debt, a study compiled by the non-profit Institute for College Access & Success, found that 62 percent of the nation's public university graduates faced an average debt of $20,200, 72 percent of nonprofit private school graduates have $27,650 in debt and 96 percent of for-profit four-year universities are, on average, $33,050 in the hole when they go job hunting.

With 49 percent of Louisiana students facing an average debt of almost $18,000, the national survey shows that, by comparison, the state's college grad debt rate is relatively low. Louisiana ranks 42nd in the amount of student debt to be paid off after graduation.

PERC contends that the state could shift more of the higher education funding burden to students, who could get loans and grants to pay the cost. It also is considering a proposal that would shift funds from the state-funded TOPS scholarship program and put the money into Go Grants for low-income students.

What the financial burden studies don't show is that salaries in Louisiana are lower than most states, which means paying off the debt takes a bigger chunk out of Louisiana students' prospective paychecks than those in other states, says Commissioner of Education Sally Clausen.

"It's all relative," she said. "Louisiana appears to be relatively low in student debt, but 40 percent of our population earns less than $25,000. So when a student ends up with a debt of $17,000 in Louisiana, it's only relatively low when compared to other states."

Students are going to college to "become better wage earners than their families," Clausen said. "But in order to gain the education they need to climb into the middle class, they have to go into debt. Going into debt is the opposite direction of where they want to go."

"There are several factors that may contribute to Louisiana's lower rate of student debt," says Randy Moffett, president of the University of Louisiana System. "One is certainly low tuition rates, as Louisiana charges one of the lowest tuition and fees in the Southern Region. This is a positive for students, but it also presents budgetary challenges for higher education.

"Another factor," he said, "could be the vast amount of students who work while attending school. These working students may incur less student debt, but the added work burden increases their time to degree."

Clausen said a survey found that 60 percent of Louisiana students are working 20 or more hours a week to help pay for their education, and 38 percent of all students are working 26 or more hours — "and they're still ending up with debt."

Moffett said that at UL System universities "students who receive federal grants must speak with a financial aid counselor and sign an informational document about debt."

Melanie Amrhein, executive director of the Louisiana Office of Student Financial Assistance, said the state-funded merit-based TOPS scholarship program and the new Go Grant program for low-income students hold down the amount of money Louisiana students have to borrow, but they still face the cost of room and board, books and numerous fees, which can be about $800 a semester.

Also, many low-income students receive federal Pell grants that cover costs.

Amrhein said the report is a fair comparison to other states, but because it is compiled with self-reported data and some schools did not respond, it's not really a fair assessment of state data.

Also, "what we consider some of the high-debt schools didn't report," she said, but would not elaborate.

Another factor that raises questions in this year's report is that the same report showed the average Louisiana graduate in 2007 faced $20,022 debt, which is $2,205 more than this year's.

"With debt and unemployment at record levels, young college graduates may feel stuck between a rock and hard place," said Lauren Asher, president of the Institute for College Access and Success, home of the Project on Student Debt. "Rising student debt is a serious problem, but struggling borrowers do have options to help manage their federal student loan debt, such as unemployment deferments and the new Income-Based Repayment program."

The report also highlights the limitations of available data, especially the lack of college-level information about the use of risky private nonfederal loans, which lack consumer protections and repayment options that come with federal loans. The recommendations call on colleges and the federal government to provide more thorough, accurate data about student debt to the public.

Since the 2000-01 school year, the national average student debt at public universities has climbed from $14,916 to $19,535, the report shows. At private schools, debt rose from $16,906 to $25,350 with a two-point increase in the percentage of students facing debt at graduation.

On the high end, District of Columbia college graduates face the biggest debt at graduation — an average of $29,793 — and Iowa students have $28,174 in loans to pay back. Connecticut, with debts totaling $26,138, New York $25,950, and New Hampshire $25,785, round out the top five.

The five states with the lowest college debt were Utah, with $13,041; Hawaii with $15,156; Kentucky, $15,951; Wyoming, $16,307; and Arizona, $17,059.

The News Star, 20/12/09

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