Debt tops $20,000 for area college grads

PHOTOGRAPHER: Sara Foss

The majority of students who graduated from Capital Region colleges in 2011 entered the real world with over $20,000 in debt.

Students who borrowed money to attend the University at Albany graduated with an average debt of $23,039, while those who attended Union graduated with an average of $26,252. Skidmore grads borrowed about $21,000, according to the Institute for College Access & Success, a non-profit organization based in Oakland, Calif. School officials said that they make an effort to keep students’ debt levels manageable.

“We’re always worried about student loan debt,” said Linda Parker, financial aid director at Union College in Schenectady. “We know it’s becoming a problem, and we work hard to keep it as low as possible.”

In New York, students who borrowed money to attend college graduated with an average of $25,851 in student loan debt in 2011, according to The Institute’s Project on Student Debt, released last week.

Nationally, the average debt for 2011 graduates was $26,600, up from $25,250 in 2010, a 5 percent jump that’s in line with the increases reported in recent years. About two-thirds of the class of 2011 graduated with loans.

Parker said Union meets the full demonstrated need of its students through a package of grants, loans and work study, and that the grants provided by the college tend to be sizable. The typical student who needs $40,000 in assistance will receive a $5,500 loan, a job where he or she is expected to earn $1,800 and a $32,700 grant. These grants can come from different sources: Union provides money, but students can also receive federal and state grants. Unlike loans, grants do not have to be paid back.

Union is a private college. In 2010-2011, its total cost of attendance was $53,950, and about 66 percent of its 2011 graduates graduated with debt, according to the report. The school increased tuition, room and board by 3.75 percent for this academic year; prior to that, the cost of going to Union had been rising by about 5 percent each year, Parker said.

Parker said that Union keeps track of the percentage of students defaulting on student loans. For the three most recent graduating classes, the rate was 2.1 percent. “That’s a good indication that we’re not saddling graduates with too much debt,” she said.

Beth Post-Lundquist, director of financial aid at Skidmore College, said it is committed to meeting the demonstrated need of all students who apply for financial aid.

Skidmore, in Saratoga Springs, is a private college that costs about $54,970 each year. About 48 percent of its 2011 graduates graduated with debt. Like Union, the school has a formula for meeting student need. The maximum loan annual amount is $3,500, and the maximum work study amount is $2,000. The rest of the students’ financial aid package is made up of grants. The school has over $36 million in grant assistance available.

Skidmore’s tuition and fees increased 3.9 percent this academic year; they increased 2.9 percent last year and 1.9 percent the year before that.

“I think every college in America better be looking at cost containment and the growth of tuition,” Post-Lundquist said. “I know our president and board are looking at everything they can do.”

At the University at Albany, about 71 percent of the school’s 2011 graduates graduated with debt. The public university’s in-state tuition and fees was $6,830 in 2010-2011; however, the total cost of attendance, which includes living expenses and books, pushes the cost of attendance closer to $20,000.

Diane Corbett, the school’s director of financial aid, said the University at Albany makes every effort to educate parents about the grant and loan assistance available, the filing deadlines and the true cost of attending college. She said that 80 percent of their undergraduates apply for financial aid, and that the school does award both merit and need-based grants. “For some families, this is the first time someone in the family is going to college,” she said. “We help them break things down.”

As a public school, the University at Albany lacks the deep pockets and large endowments of smaller, private liberal arts schools.

“I hear about private schools and their very large endowments, and it sounds wonderful,” Corbett said. But she added that the University at Albany provides “a great value, a high quality education for a good price.”

Here are the student debt amounts for other schools in the Capital Region, according to the Project on Student Debt report.

• At Siena College, 77 percent of 2011 graduates graduated with debt; the average debt was $29,700

• At Rensselaer Polytechnic Institute, 70 percent of 2011 graduates graduated with debt; the average debt was $29,625.

• At The College of St. Rose, 88 percent of 2011 graduates graduated with debt; the average debt amount was not available.

• At the Sage Colleges, 90 percent of 2011 graduates graduated with debt; the average debt amount was $26,159.

Sixty percent of New York’s 2011 college graduates graduated with debt, according to the Project on Student Debt.

State averages for debt at graduation in 2011 range from $17,250 to $32,450, with New Hampshire having the highest level of debt and Utah, having the lowest. New York’s graduates had the 19th highest level.

Matt Reed, the report’s primary author, said that the actual state debt averages, which are based on data reported voluntarily by the schools, are likely higher than the estimates included in the report, and that New York’s average is slightly above the national average.

Reed said that students who attend New York’s public schools tend to carry less debt than the public school graduates from other states, but that the state’s private school students tend to carry more debt than students who attend private schools elsewhere. New York, he said, has a higher proportion of students graduating from private schools than other states, which pushes up its average debtload. He said that New York’s public schools are priced very reasonably, but that the state’s high cost of living makes going to college in New York more expensive.

Reed also singled out for praise, New York’s Tuition Assistance Program, which provides students who qualify for assistance with a maximum grant of $5,000. Not every state has a such a program.

Reed said that 2011 graduates face a tough job market, and that the unemployment rate for young graduates was 8.8 percent, a slight drop from 2010’s record high of 9.1 percent. Many of the graduates who did manage to find jobs were underemployed, meaning they were working part-time or in jobs that did not require a college degree. But studies show that college graduates still fare better in the job market than people with less education. In 2011, the unemployment rate for young high school graduates was 19.1 percent.

“Going to college is still a good investment,” Reed said.

But he said the type of debt students take on matters. Subsidized federal loans come with certain protections, such as an income-based repayment plan, while private loans tend to be riskier and have higher interest rates. For 2011, private student loans comprised about one-fifth of what graduates owed. Reed said that studies have shown that many of the students who take out private loans could have borrowed more in federal money, but were unaware of it.

Reed said that for-profit colleges were excluded from the study because so few report the necessary data. But he said that a federal study of for-profit schools found that about 96 percent of all for-profit students take out loans, and that their loan amounts are about 45 percent higher than the loan amounts of students who attend public and private non-profit schools.