Record debt for graduates In 2016: Students owe an average of $37,172 UPDATE Posted by Chris Tyler | May 20, 2016 | US | 1 | Share this:TweetShare on TumblrEmail Related Share: Rate:
The postsecondary student debt is dramatized by including graduate and professional loans loans. Graduate and professional school loans ( medical and law school) are not eligible for most federal loan programs but are generally not a burden for graduate and professional school graduates. Also often omitted from the sensationalized postsecondary student debt is the fact that Ivy League college graduates often graduate with a lower student debt amount that most students from public state institutions because of generous tuition discounts and financial packages. Same can be stated for students attending private higher education institutions. And, the vast majority also graduate with a degree.
The fact is that undergraduate student loans are substantial in terms of options and access. And there are numerous repayment options that are means based (income). Further, the research shows that the vast majority of undergraduates that attain a certificate or degree are able to pay for their loans and not default. Those defaulting are primarily those that do not persist to graduation and accumulate a relative modest level of student debt ($5,000 or less). These students also tend to be first generation, for profit school attendees and/or academically unprepared students, which are identifiable characteristics that warrant proactive actions to assist them to persist and graduate. Lastly, for the lower socioeconomic students Pell Grants are a possibility, and those grants do not require repayment. That is a societal investment, which I believe should be repaid if the student fails to graduate. A form of pay for performance that may motivate some to persist.
Therefore, let’s stop sensationalizing postsecondary student debt while also discounting the responsibility of the student and their families. The blame for student debt seems to focus on the consequences of tuition increases, corrupt for profit institutions, lack of financial aid, which is fallacy based on years of steady increase in federal financial aid, rather than on poor academic preparation, lack of persistence, poor financial planning or knowledge, and career and institutional choices. Specifically, selecting a low paying career field and/or selecting an expensive institution/program are personal choices that may have poor long term financial consequences that most be considered to be personal responsibility. Thus, there is a strong element of personal responsibility that most be factored in the discussion of postsecondary student debt. Further, let’s focus on the know factor that cause student loan default, which is the critical issue not the amount of the student debt. Having a “large student debt balance” is not synonymous with a poor investment or the ability to repay the debt.