Overview
A college degree is practically a necessity these days, not only for the individual student, but for the economic and social health of the country. But the combination of shrinking state budgets and stagnant grant aid has led to an increased reliance on student loans to pay for college. Just 12 years ago only one-third of college graduates from four year public colleges needed to borrow money to attain a college degree, and now more than two-thirds of graduates have federal student loan debt. Twelve years ago, graduates who borrowed carried around $12,000 of debt on average, and now they carry over $23,000 on average. Worse, the percentage of students with $25,000 worth of private student loan debt has increased, from 5 percent in 1996 to 24 percent in 2008.
Relying on student loans to pay for college can have negative consequences. Too much loan debt causes qualified students to opt out of college completely; it causes current students to work too much and study less, and it causes borrowers who’ve graduated to opt out of socially valuable careers, and to delay life milestones like buying a home or getting married. Students who take up private student loans to defray costs face riskier terms and conditions in repayment.
A college degree must remain within reach for families of modest means, and affordable over the long term for the borrowers and parents in repayment. In response, USPIRG works to increase student grant aid, make debt levels more manageable, and protect students as consumers from practices that contribute to educational debt.
We need robust grant programs on a state and federal level, a simpler system of student aid that actively encourages student and parental participation, and stronger safeguards for student borrowers in repayment.
Also, we can lower student debt by protecting student consumers. College students pay unjustifiably high amounts for college textbooks each year. And those who rely on credit and debit cards to help offset day to day costs of education, or to access their financial aid disbursements, can get slapped with penalty fees and terms that take advantage of them.
