Rising debt for grads
Students owe more as parents contribute less
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University alum Jen Stone aspires to work for Planned Parenthood or the National Organization for Women, two prominent non-profit organizations.
But before she can devote herself to social work, Stone has one major obstacle: an estimated $60,000 to pay back in loans.
According to calculations from the Project on Student Debt, debt for graduates of public universities has increased by 65 percent over the past decade when adjusted for inflation. In 2005, the average U.S. college student graduated with about $20,000 in debt, while University students owed on average $22,312 after graduation.
Stone, who paid in-state tuition, said the high debt levels are associated with the living expenses in Ann Arbor and three years of living in Stockwell Residence Hall.
Among the several factors leading to rising debt levels is that parents are contributing less financially, said Margaret Rodriguez, associate director of the Office of Financial Aid.
Rodriguez said the trend is reflected in the increased frequency with which students seek loans when compared to the number of parents who take out loans using plans specified for parents funding their children's education like the Federal Plus Program.
"Federal-Plus Program (Parent Plus Program) has remained flat for the last 6 years while out volume of private loans has increased 600 percent in the same time period," she said.
Rodriguez also said increasing costs of education coupled with declining federal resources like work-study grants, Perkins Loans and Federal Student Educational Opportunity Grants have worsened the situation for students.
Another factor, she said, is a shift in state priorities from need-based grants to merit-based aid - which leaves many low-income students having to take out private loans.
Stone said her lack of knowledge about loans might explain why she owes more than the average graduate. She said her father filed her loans, and that she didn't understand the loan payment plans outlined by the Office of Financial Aid.
"The federal aid exit program is not really good at telling you what's good and what's bad," Stone said.
Rodriguez said the University tries to ease the burden of rising debt levels for students by allocating an amount of grants to "self-help," which includes work-study and loans.
Increasing debt levels are liable to affect the direction students take after graduation. According to the National Opinion Research Center, graduates with debt after obtaining an undergraduate degree are less likely to pursue higher education than graduates with no debt.
But before she can devote herself to social work, Stone has one major obstacle: an estimated $60,000 to pay back in loans.
According to calculations from the Project on Student Debt, debt for graduates of public universities has increased by 65 percent over the past decade when adjusted for inflation. In 2005, the average U.S. college student graduated with about $20,000 in debt, while University students owed on average $22,312 after graduation.
Stone, who paid in-state tuition, said the high debt levels are associated with the living expenses in Ann Arbor and three years of living in Stockwell Residence Hall.
Among the several factors leading to rising debt levels is that parents are contributing less financially, said Margaret Rodriguez, associate director of the Office of Financial Aid.
Rodriguez said the trend is reflected in the increased frequency with which students seek loans when compared to the number of parents who take out loans using plans specified for parents funding their children's education like the Federal Plus Program.
"Federal-Plus Program (Parent Plus Program) has remained flat for the last 6 years while out volume of private loans has increased 600 percent in the same time period," she said.
Rodriguez also said increasing costs of education coupled with declining federal resources like work-study grants, Perkins Loans and Federal Student Educational Opportunity Grants have worsened the situation for students.
Another factor, she said, is a shift in state priorities from need-based grants to merit-based aid - which leaves many low-income students having to take out private loans.
Stone said her lack of knowledge about loans might explain why she owes more than the average graduate. She said her father filed her loans, and that she didn't understand the loan payment plans outlined by the Office of Financial Aid.
"The federal aid exit program is not really good at telling you what's good and what's bad," Stone said.
Rodriguez said the University tries to ease the burden of rising debt levels for students by allocating an amount of grants to "self-help," which includes work-study and loans.
Increasing debt levels are liable to affect the direction students take after graduation. According to the National Opinion Research Center, graduates with debt after obtaining an undergraduate degree are less likely to pursue higher education than graduates with no debt.
Anonymous
posted 5/30/07 @ 9:21 AM EST
Heh. Well, if Ms. Stone would have worked on a degree that actually had some value she might not have to worry so much about getting a job where she made enough to pay off her debts. (Continued…)