At colleges and universities across the country, the class of 2013 is leaving campus with more than just a diploma in hand. The average debt of this year’s college graduates is $30,000, a number that has doubled in the past 20 years, even after adjusting for inflation, according to Mark Kantrowitz, publisher of FinAid and FastWeb, two student-aid websites.
The problem is that while student loan debt is on the rise, it’s nearly impossible for prospective college students and their families to find out how much debt they might graduate with from a specific college. Averages are fine, but few students go to the average college.
Want to know how much you might borrow if you were to major in business administration at the University of Southern California? Good luck finding an answer.
If you go to the U.S. Department of Education’s College Navigator, you’ll find the average loan amount for all undergraduates at USC who took out loans in 2010-11. But you can’t just multiply that by four since financial aid packages typically change every year.
The president’s College Scorecard displays an estimated monthly payment—very useful since that’s how we actually think about household budgets—but the number includes parent loans as well, not just the debt for which the undergraduate is ultimately responsible.
With families increasingly asking about the return on investment of their college education, the median debt number is critical for families to have at their fingertips as they weigh the decision about where to go to college.
Some colleges self-report these data as part of an annual survey by several organizations, including U.S. News & World Report, but many institutions don’t participate or don’t respond every year. Only about half of four-year colleges, for instance, report figures for average debt and percentage of students with loans. As a result, the best numbers we have on student debt are for broad groups of borrowers, which are not useful to most families making decisions about where to go to college.
Lawmakers in Washington are immersed right now in the debate over how to set the interest rates on student loans. The outcome of that discussion is of great concern to students and parents, but so too is knowing the median debt at graduation. The government should require that institutions disclose median debt for students who take out loans, both by institution and by major. Averages are not good enough.
Photo Credit: Jones County Junior College