The Consumer Report Survey on College Debt

I’m reading through Consumer Report‘s “College Financing Survey” this morning. There’s good data in this report that I plan to use in articles in the fall. As I’m plugging the numbers into my notes, I thought I would put some of their findings on this blog. See what y’all think.

They surveyed 1,550 people, aged 21-40, with college debt. Looks like pretty sound methodology.

Level of debt. Respondents reported an overall student loan debt median of $20,851 and the median cost for one year of college of $14,359. Given the cost of college, that 20 grand is pretty modest. Yesterday, I was checking out the costs for the University of Vermont. Out-of-state tuition/room and board for one year at this public costs is $55,000. I imagine that it would be quite easy to get into six figure debt.

Even though 20K seems like a reasonable amount of debt, it still has a huge impact on students. Half of the students who graduated said that they had trouble making a payment at least once. Three quarters of students who never graduated said that they had a problem making a payment. 44 percent of all respondents said that this debt meant that they had to cut back on day to day expenses.

It impacts on their dating lives. 44 percent said that they would want to know how much debt a person had before entering into a serious relationship.

Their most stunning finding is that 45 percent of respondants said that college was not worth the cost. That bitter college attendees didn’t have more debt than satisfied college attendees. The bitter-types had lower salaries than the college enthusiasts.  Most of the bitter ones had attended two year collges. Still, a third of college bitter types were at public, 4-year schools and private, 4-year schools. I would like to know the majors of the bitter-types.

Respondents said that they recieved very little information about college finances from their high schools or colleges.

Debt levels were higher at four-year public colleges ($28,750) than at four-year private colleges ($26,000).  (That might be because private colleges offer more merit scholarships or because the parents had saved more for those students.)

But the colleges that the respondants attended don’t seem to match up with the colleges that my kid has on his short list. The report says that the median price tage on the total costs of an out-of-state public college is about $16K – not the $55K that we’re seeing. I wonder if all the debt and stress is higher at the more selective colleges.

13 thoughts on “The Consumer Report Survey on College Debt

  1. Laura said:

    “Debt levels were higher at four-year public colleges ($28,750) than at four-year private colleges ($26,000). (That might be because private colleges offer more merit scholarships or because the parents had saved more for those students.)”

    That is fascinating.

    “But the colleges that the respondants attended don’t seem to match up with the colleges that my kid has on his short list. The report says that the median price tage on the total costs of an out-of-state public college is about $16K – not the $55K that we’re seeing. I wonder if all the debt and stress is higher at the more selective colleges.”

    Could that be a regional/cost-of-living thing?

  2. I don’t have time right now to read the CR report. I will later. Off the top of my head, though, was that debt figure only the students’ debt, or was it the family’s debt as well? Mortgage debt can be settled by selling a house; student debt is non-dischargeable. It’s much better to escape non-dischargeable debt if possible.

    One of the most important things to do is to insure your child’s life, so that the college debt can be paid off, should the worst happen.

    There’s a big difference between sticker cost and net cost, and it varies by student. I gather, from reading College Confidential posts left after students received their merit offers, yes, merit offers are unpredictable. At this point in the process, the cost is officially $55 K for everyone. Next spring, students will be comparing very different offers. (Our local state college system has affordable “tuition.” The real costs come in “fees.”)

    I have noticed that some for profit colleges (here’s the snob remark–“that I’ve never heard of”) demand $55K, but offer very little aid or discounts. I think the least sophisticated students are the most likely to fall for such colleges.

    If you’re interested in out of state schools, remember to include travel costs. Also, is it possible for students to rent apartments near to campus? Are those apartments affordable?

    It’s also important to realize that need-based aid has a catch. If the family’s income improves, suddenly a family’s tuition load can drastically increase from year to year, even at the wealthiest schools. My child has friends who have had to deal with this.

  3. On reflection, it would probably be a good idea to count all debt acquired during the college years, rather than just “student” loans.

  4. Being debt free and dating someone who is debt free is probably one of the ways I feel most privileged compared to many people my age. It’s allowed me and my partner to save decent sums of money while earning not very much (we’re both PhD students), and it’s also allowed us to pursue careers/interests that don’t pay a lot of money. My parents college plan was that we’d get into an elite private school with generous need-based aid, or we’d go to our local public school on a merit scholarship. For my future kid(s), my plan is if the EU still exists, they can go to school for no or low tuition in the EU (they’ll have EU citizenship). A part of me assumes we’ll have an environmental apocalypse before they’re adults, in which case worrying about college is a moot point. I should probably be teaching them machete skills, or how to find ground water.

  5. Cranberry said:

    “Off the top of my head, though, was that debt figure only the students’ debt, or was it the family’s debt as well?”

    Good point.

    “One of the most important things to do is to insure your child’s life, so that the college debt can be paid off, should the worst happen.”

    Yes.

    “Our local state college system has affordable “tuition.” The real costs come in “fees.””

    We have a free tuition option through my husband’s college (which we really, really want to take advantage of). However, the fees and books (which are not covered) seem to run around $5k a year.

    “Are those apartments affordable?”

    I suspect cost of living probably contributes to NYU having such disastrous student loan stats.

  6. Also, some schools mainly just take into account parents’ income, while others look at not-necessarily-liquid assets. Coming from a low/moderate middle class income family with decent assets, I was lucky my school looked mainly at income. My friend, whose parents earn not a whole lot but owned their own business, received a much less generous aid offer from her wealthy private school because they took into account the worth of her dad’s business, which wasn’t exactly something he could or would sell to fund her college education.

  7. Agree with the point made by others. My son (a recent graduate from an expensive private college) has zero debt. But that’s only because we, his parents, took on massive quantities of debt (via a home equity loan) to send him there. I would bet that many upper middle class parents do the same and these debts don’t show up on the surveys.

  8. Yesterday, I was checking out the costs for the University of Vermont. Out-of-state tuition/room and board for one year at this public costs is $55,000.

    You could go to Nebraska for more than $20,000 less. Lincoln is nice.

    1. When I was researching cheap state schools for Chinese international students a few year ago, IIRC either North Dakota State or U of North Dakota clocked in at the cheapest. Out of state tuition was around $6,000, with room and board the total came to around $18,000…

      1. Wow, that is quite a bargain for an international student, especially including room and board.

  9. International students pay the same as other out of state students, I think (minus travel, testing, visas, and any special interviewing). Of course, most of them have to be relatively richer in their own countries (at least, that’s still true).

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