Although many do not expect to live a life of luxury immediately after college, growing trends in student debt are creating an even harsher reality for many new college graduates.
A recent report shows a significant number of students who graduate from four-year institutions, both public and private, are more than $30,000 in debt upon graduation.
The College Board Advocacy and Policy Center report published Monday found in the 2007-08 academic year, two-thirds of all students who received their bachelor’s degrees were in debt after graduation and 17 percent owed more than $30,500, according to the study.
Co-author of the report Patricia Steele said she was surprised at the high percentage of students from for profit colleges who owed more than $30,500.
However, the amount of money a student owes does not correlate with the ability to pay the money back, co-author of the report Sandy Baum said. She also said the ability for a student to pay back debts was not included in the survey.
“What’s surprising is that half of BA recipients at for-profit campuses graduate with this much debt. This is true for all income groups in this sector,” Steele said in an e-mail to The Badger Herald.
The report also looked at race when considering national trends in debt.
According to the report, black students were most likely to graduate with high levels of debt compared to other races, with 27 percent of black students graduating with more than $30,500 in debt. At the same time, only 16 percent of white students graduated with similar levels of debt, while 14 percent of Hispanic and 9 percent of Asian students did.
Baum said the College Board was not sure why there was a higher percentage of black students in debt, and it needed to be studied more, although she speculated it may be because they are coming from lower income families and are getting less financial help paying for school.
This statistic may only portray a part of the relationship between race and student debt, however. Approximately 50 percent of the students in each of the previously mentioned ethnic groups owe less than $30,500.
The University of Wisconsin is no exception when it comes to student debt. Out of the UW undergraduates who finished school in the 2008-09 academic year, 48.1 percent had some debt, according to UW Financial Aid Director Susan Fischer.
She added the average amount owed by students in debt was $22,858.
Fisher said there was a large range in the amount of debt UW students took on last year.
“The low end was $198 and the high end was someone who went out of their mind and borrowed $137,129,” Fischer said.
Fischer added having some debt after graduating is not always a bad thing and can be a good motivating factor to help students graduate and find jobs as long as they take the debt seriously.
