Student debt jumped five percent for 2011 graduates compared to the debt load of 2010 graduates. It leaves young adults, typically just 22 years old, carrying an average debt of $26,600 before they even begin their first full-time job.
A rough job market is making things worse for them as 37.8 percent of recent graduates are working in jobs that do not require a college degree. These are low wage jobs and also likely to be part-time employment. The predicament leaves recent graduates between a rock and a hard place. Student loan repayment begins six months after graduation… either December or January for many of them.
A caveat about the study:
Cochrane said, “Unfortunately too little data is available to consumers.” TICAS’ report was compiled out of data voluntarily provided by schools, and though they estimate this report covers about 79 percent of bachelor’s degrees earned in 2010 and 2011, many colleges — including many for-profit colleges that target low-income students — chose not to disclose the data.
“Twelve percent of the colleges that reported debt data for 2010 didn’t report for 2011, and virtually no for-profit colleges reported at all. The need for federal collection of key debt information at all colleges could not be more clear,” said report author Matthew Reed in a press release. The report recommends the Department of Education expand the amount and type of data it collects to better illustrate a picture of debt level for students upon graduation.
This could mean the debt load carried by recent graduates is higher than reported. Plus this is an average that can be skewed by outliers on either side of the spectrum.
My student loan debt upon completing undergrad was higher than this and I finished seven years ago. Tack on graduate school and the burden also carried by a partner… a small town home mortgage!
At some point this bubble will burst much like the housing market. High school graduates might also decide to forgo college altogether. The smartest move involves community college and/or state schools but these are feeling the budget crunch on the state and federal level too.
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