A report by the Institute for College Access & Success (TICAS) suggests student loan debt is a growing problem for graduates as well as academic institutions and lenders. “Student Debt and the Class of 2015,” an eleventh-annual report, was published on October 18, 2016 with statistical analysis about recent graduates. The 24-page study finds “wide variations in debt levels across states as well as colleges.”
Colleges are not required to report debt levels for their graduates, so the study relies on voluntary submissions from public and nonprofit colleges where 93% of bachelor’s degrees were earned in 2015. (Only 2% of the 612 for-profit colleges and universities with undergraduate programs filed reports.)
According to the U.S. Department of Education, the debt problem may be even worse than the numbers indicate because some colleges under-report loan defaults in an effort to remain compliant with federal financial aid regulations.
“Student debt is still rising, and the typical college graduate now leaves school with over $30,000 in loans,” said TICAS President Lauren Asher. “We need to make college more affordable and debt less burdensome for students and families.”
A summary of the most recent data:
19% of debt was from non-federal loans.- 68% of seniors graduating from public and private nonprofit colleges had student loan debt.
- Students owed an average of $30,100, a 4% increase from 2014.
- 90% of students in 43 colleges graduated with debt
- State averages of student loan-debt ranged from $18,850 to $36,100.
- 70% of students in six states graduated with debt averaging between $27,639 and $36,101.
19% of debt was from non-federal loans.About the Institute for College Access & Success
The Institute for College Access & Success (TICAS) is an independent, nonprofit, nonpartisan organization working to make higher education more available and affordable for people of all backgrounds. The Project on Student Debt increases public understanding of rising student debt and the implications for US families as well as the national economy and society.
Student Loan Debt Recommendations
The publication includes “policy recommendations to address rising student debt and reduce debt burdens, including collecting more comprehensive college-level data. Other recommendations focus on reducing the need to borrow, keeping loan payments manageable, improving consumer information, strengthening college accountability, and protecting private loan borrowers.”
Private loans represent nearly 20% of graduate debt, but only 7% of college degrees, so they clearly pose a significant challenge to banks and lenders as well as students.
According to the report, “Carrying nonfederal loans can significantly affect borrowers’ ability to repay what they owe because such loans typically have higher costs than federal loans and provide little, if any, relief for struggling borrowers.”
Solutions for Student Loan Debt
TICAS believes financial aid offices can help reduce students’ reliance on private loans by informing them about federal loan eligibility before certifying private loans.
From the institutional side, banks and private lenders relying on colleges to certify student eligibility have a better return on investment than those using parameters based on market conditions.
Favorable return is also realized by lenders taking a proactive approach at the beginning of the loan lifecycle. Using a diplomatic style, graduates with past-due accounts are contacted and encouraged to participate in repayment plans while remaining engaged with the university and community.
Optio recognizes the special circumstances of those having student loan debt, and approaches them with understanding and sensitivity. The agency uses surveys to gauge the effectiveness of its program, and if necessary, implement change to enhance the repayment process.
Learn how Optio can help your organization recover student loan debt with an individualized program that fosters retention and brand protection. Contact us today.
