Crushing college debt

Early in my career, I never worried about student debt.  Now I think about it all the time.  I remember one adult student telling me, "You know, I paid more for my new car that my degree will cost me.  And I'll have to replace that car in five or six years but my degree will not expire."  And this was at a private school, but even there college costs were reasonable.  I certainly believe in the value of higher education, but these high levels of debt are troubling. Fortunately, I could help my kids earn their bachelors degrees without debt.  Of course, they're on their own for graduate study. Anyway, Tamar Lewin in the New York Times notes that student loan debt is larger than credit card debt for the first year...

College Loans Weigh Heavier on Graduates
While many economists say student debt should be seen in a more favorable light, the rising loan bills nevertheless mean that many graduates will be paying them for a longer time.

“In the coming years, a lot of people will still be paying off their student loans when it’s time for their kids to go to college,” said Mark Kantrowitz, the publisher of FinAid.org and Fastweb.com, who has compiled the estimates of student debt, including federal and private loans.

Two-thirds of bachelor’s degree recipients graduated with debt in 2008, compared with less than half in 1993. Last year, graduates who took out loans left college with an average of $24,000 in debt. Default rates are rising, especially among those who attended for-profit colleges.

The mountain of debt is likely to grow more quickly with the coming round of budget-slashing. Pell grants for low-income students are expected to be cut and tuition at public universities will probably increase as states with pinched budgets cut back on the money they give to colleges.

Some education policy experts say the mounting debt has broad implications for the current generation of students.

“If you have a lot of people finishing or leaving school with a lot of debt, their choices may be very different than the generation before them,” said Lauren Asher, president of the Institute for Student Access and Success. “Things like buying a home, starting a family, starting a business, saving for their own kids’ education may not be options for people who are paying off a lot of student debt.”

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