Graduating With a B.A. and an IOU

As college tuition has risen, so have student loans, creating a predictable fallout: a growing number of students graduating deeply in debt.

A recent survey by a private scholarship management group found that the percentage of college graduates leaving school owing more than $5,000 on their student loans nearly doubled between 1990 and 1995, growing from about 23% to about 42% in that time period.

“There’s no question that a combination of rising costs and fiscal pressures on government is dumping an increasing debt load on students,” said Bill Nelson, president of Citizens’ Scholarship Foundation of America, which conducts the annual study.

Nelson noted that there also was an increase in the number of students owing more than $10,000, with 28% of the 1,550 students surveyed carrying that much in loans, up from slightly less than 20% five years earlier.

The only encouraging trend was in the study’s very top bracket--students carrying more than $20,000 in loans--where there was a slight decrease: from nearly 13% of graduates surveyed in 1990 to 9% in 1995.

At the same time, among those who received outright grants to help with their educations, more relied on money awarded directly by their colleges rather than by federal or state sources, reflecting the diminishing availability of public grants.

At least a third of the students anticipated not being able to pay off their loans for more than a decade, expecting to make monthly payments until they are well into their 30s.

The survey identified a few encouraging signs. In two areas, students remained about even during the last five years: More than two-thirds completed their college degrees in four years, and half of them found jobs within a month of graduation.

In fact, less than 15% of those surveyed reported that they were still jobless a year after graduation, and most of those were in graduate school.

Although this would seem to put them in better shape to take on those college debts, there was one glitch in that plan. When asked to estimate their salaries, two-thirds of the recent graduates reported in 1995 that their new jobs paid less than $25,000 a year, half of those less than $15,000.

Those numbers were about the same reported by the 1990 graduates.

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Graduating in Debt

A new national survey found that 53% of students graduating from college owe money on their college loans--and some owe more than $20,000.

Amount of Debt: None

(year of graduation)

1990: 56%

1991: 54%

1992: 54%

1993: 52%

1994: 47%

1995: 47%

*

Amount of Debt: $1-$1,00

(year of graduation)

1990: 4%

1991: 4%

1992: 3%

1993: 3%

1994: 3%

1995: 3%

*

Amount of Debt: $1,001-$5,000

(year of graduation)

1990: 15%

1991: 12%

1992: 10%

1993: 12%

1994: 12%

1995: 9%

*

Amount of Debt: $5,001-$10,000

(year of graduation)

1990: 5%

1991: 11%

1992: 11%

1993: 13%

1994: 13%

1995: 13%

Amount of Debt: $10,001-$15,000

(year of graduation)

1990: 4%

1991: 4%

1992: 7%

1993: 8%

1994: 12%

1995: 11%

*

Amount of Debt: $15,001-$20,000

(year of graduation)

1990: 2%

1991: 3%

1992: 5%

1993: 5%

1994: 7%

1995: 8%

*

Amount of Debt: $20,001 and up

(year of graduation)

1990: 13%

1991: 11%

1992: 9%

1993: 7%

1994: 6%

1995: 95%

Source: Citizens’ Scholarship Foundation of America, 1996.