The latest figures from the Institute for College Access and Success, a California-based non-profit, are alarming. They show that nearly two-thirds of college graduates who finished college in 2011 left school carrying student loan debt in the amount of – on average – $26,600. Furthermore, some are saying that the true numbers are actually worse, since the TICAS report, released last Thursday, doesn’t include loan information from for-profit universities where students tend to carry higher debt loads than their counterparts at non-profit schools.
Another year of student loan growth is particularly worrisome in light of the state of the employment market faced by recent college grads. Although the unemployment rate for college graduates has been holding steady at 4.4%, among 2011 graduating class, nearly 8.8% remain unable to land a job.
Still, those who have higher education certifications are still in a better position than those who attempted to enter the workforce right out of high school. The unemployment rate for people looking for a job while holding only high school credentials is a staggering 19.9%
However, TICAS President Lauren Asher points out that even with increasing tuition and growing debt, the overall return on investment in a college education remains good.
“In these tough times, a college degree is still your best bet for getting a job and decent pay,” said Asher. “But, as debt levels rise, fear of loans can prevent students from getting the education they need to succeed. Students and parents need to know that, even at similar looking schools, debt levels can be wildly different. And, if they do need to borrow to get through school, federal student loans, with options like income-based repayment, are the safest way to go.”
That might seem not at all obvious to the one-third of graduates who already made the investment and are now working jobs that did not require college-level expertise. Although he didn’t make clear all the related details, Governor Mitt Romney’s assertion that more than 50% of college graduates were unable to to land jobs was also somewhat correct. According to the Northeastern University’s Center for Labor Market, data shows that 53.6% of college graduates holding bachelor’s degrees under the age of 25 were employed in positions that didn’t make full use of their degrees.
As for those who have no job at all, according to Georgetown the latest monthly unemployment figure for college graduates under age 24 is 10.5 percent (the figure typically jumps each spring as a new class graduates and declines over the course of the year; last March it was 5.4 percent).
“Increasing student debt in a weak economy can be a knock-out blow to many considering college,” said Rich Williams, higher education advocate with U.S. Public Interest Research Group, which advocates for students. “As our economy is recovering, lawmakers must send every signal that college is a good investment. “