Student loan debt lower than average

CSULB undergraduates usually owe $6,350, graduates owe $10,000, financial aid associate director says

By Michelle Fithian, On-Line Forty-Niner

Tuesay, October 6, 1998

Nearly 18 percent of public, four-year college students have student loan debt levels exceeding their current salaries, according to the results of the National Student Loan Survey conducted by Nellie Mae.

However, student loan debt at Cal State Long Beach is lower than the national average, said Dean Kulju, associate director of financial aid.

"Given that we've done surveys [with national publications] the average indebtedness is fairly low," Kulju said. "Undergraduates average $6,350, and graduates average around $10,000."

Additionally, 12 percent of all undergraduates report that their monthly student loan payments represent more than 20 percent of their monthly income, according to the results of the survey conducted by Nellie Mae, one of the nation's largest providers of student loans.

The study shows that although student loan debt is higher than ever, most respondents felt that it was worth it to borrow for a college education.

A substantial 47 percent of public school undergraduate borrowers felt that the loans were a burden to them.

According to the study, some former undergraduate students, particularly those in art and music, have debt levels so high that they feel their starting salaries are inadequate.

While most students are able to repay their loans successfully without significant impact on their lifestyle, that number is apparently getting smaller over time, said Lawerence O'Toole, president and chief executive officer of Nellie Mae.

Students should consider the salary potential of a chosen career early on so there will be a strong likelihood that the salary will support repayment after graduation, O'Toole said.

Data from the study showed that the average student loan debt amount increased from $8,200 in 1991 to $18,800 in 1997 (median debt was $13,000). In addition, 36 percent of all borrowers surveyed in 1997 said that they experienced hardship from their student loan debt as opposed to 25 percent in 1991.

Of the undergraduate borrowers surveyed in 1997, 45 percent said they would borrow less if they could do it over again, as opposed to 31 percent of all borrowers in 1991.

Average debt was $10,900 for public school borrowers, and $15,300 for private school borrowers. Some graduates feel that their college education debt is causing them a delay in starting families, purchasing homes and making other major life decisions.

Undergraduates' growing use of credit cards is also impacting borrowers' ability to repay their student loans. In a separate study, Nellie Mae found undergraduate credit card balances average almost $2,000.

The survey confirms what many have suspected. While student loans have helped millions of students gain access to a post-secondary education, debt incurred from borrowing to cover the cost of college is becoming more of a burden for some students. More than half of all college students now finance their education in part through loans, O'Toole said.

To help curb student loan debt burden, Nellie Mae encourages greater debt-management education for borrowers, employer assistance in repaying employees' student loans, and college and university financial aid packages that are not heavily comprised of loans.