Monday, December 7, 2015

Put Student Debt Report Recommendations to Work at Your School

Submitted by: Angela Henry, USA Funds Account Executive

The Institute for College Access & Success’ 10th annual report onstudent debt at graduation has a host of valuable findings and recommendations — and serves as a great starting point for developing action items to address default prevention at your school.

StudentDebt and the Class of 2014” has new national, state-by-state and college-level findings about recent bachelor’s degree recipients and a look at 10-year trends. First, a few key findings from the report worth noting:

  • Seven in 10 graduates of public and private institutions in 2014 had student loan debt, the same figure as that for 2013 graduates. In 2014, private student loans comprised about one-sixth of that debt.
  • Per-graduate borrowing averaged $28,950 for 2014 graduates, up 2 percent from the 2013 average of $28,400.
  • Graduates from 2014 were more likely to have student loan debt than were 2004 graduates, with 69 percent of 2014 graduates in debt compared with 65 percent of 2004 graduates.
  • The level of debt for 2014 graduates was much higher than that for 2004 graduates. The $28,950 average debt at graduation for 2014 graduates represents an increase of 56 percent when compared with 2004’s average of $18,550. That increase is more than double the rate of inflation over that period.
  • Tough economic times during the period between 2004 and 2014 have had an impact on borrowers’ ability to repay student debt. Each year between 2004 and 2008, the unemployment rate for recent college graduates was below 6 percent. But since the end of a recession in 2009, each year that unemployment rate has been greater than 7 percent. Unemployment for young college graduates in 2014 was 7.2 percent.
  • The report notes that, while its focus is on the debt of students who recently graduated from college, “the borrowers who struggle most to repay their loans are those who do not graduate.” Also, “completers are more likely than noncompleters to be paying down their debt.”

As the report points out, federal student loans make college possible for many students. But rising debt levels can have a negative impact on students’ futures. The following are some of the policy recommendations from “Student Debt and the Class of 2014” — and my thoughts on how you can help make these recommendations a reality at your school:

Reduce the need to borrow — Find ways to incorporate information about students’ many options for financial aid before they begin school and throughout their time at your institution. From new-student orientation to required and supplemental loan counseling, include messages about reduced reliance on borrowing.

Help keep loan payments manageable — Make sure your student loan counseling sessions include information about all of the flexible federal student loan repayment options — including the Revised Pay as You Earn (REPAYE) repayment option.

Help students and families make informed choices — Provide financial literacy and student success training to students throughout their academic career and beyond.

Reduce private loan borrowing — For students who must borrow to cover the cost of their education, encourage them to pursue federal loans before considering private loans — which typically are costlier and offer fewer consumer protections.

If you need assistance with default prevention planning, visit

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