Setting the Record Straight on Student Debt
An article in the Boston Globe referred to findings by the Pew Research Center that shows the increasing economic difficulties for young adults who lack a bachelor’s degree in today’s economy that’s polarized between high- and low-wage work. As a whole, high-school graduates were more likely to live in poverty and be dissatisfied with their jobs, if not unemployed.
In contrast, roughly nine in 10 college graduates ages 25 to 32 said that their bachelor’s degree had paid off or will pay off in the future, according to Pew’s separate polling conducted last year. Even among the two-thirds of young adults who borrowed money for college, about 86 percent said their degrees have been, or will be, worth it.
The Council of Independent Colleges (CIC), of which McMurry University is a member, has issued an update to a fact sheet on student debt and college costs that was originally issued in 2012. The CIC examines the myths about student finance and sets the facts straight. (Council of Independent Colleges, April 2014)
Myth: Many students owe more than $100,000 when they graduate.
Fact: In 2012, only 4 percent of borrowers owed $100,000 or more in student debt. The average debt level of bachelor’s degree recipients at independent colleges and universities is $19,500—less than the price of a modest automobile.
Chart: Average Student Debt
Myth: High levels of student debt make independent colleges unaffordable.
Fact: One quarter of students who graduated with a bachelor’s degree from an independent college or university did not have any educational debt. For those who borrowed, the difference between the median debt levels for graduates of public versus independent institutions is only $4,375.
Chart: Undergraduate Debt Levels
Myth: Only wealthy families can afford to send their children to independent colleges.
Fact: Independent colleges enroll students of all financial backgrounds and at about the same percentages as public institutions for low- and middle-income students.
Chart: Enrollment by Family Income
Myth: It is very difficult to receive financial aid at independent colleges.
Fact: A larger percentage of students at independent colleges receive financial aid than students at other types of institutions. Students enrolled at independent colleges are twice as likely to receive grants from their institutions as students enrolled at public institutions (80 percent vs. 40 percent), and more than three times as likely as students at for-profit institutions (80 percent vs. 24 percent).
Myth: Students at public institutions get more financial aid than students at independent colleges and universities.
Fact: Students at independent colleges receive three times the amount of institutional aid ($14,826) as do students at public institutions ($4,765), and five times as much as students at for-profit institutions ($2,872). Independent colleges give students nearly six times as much institutional grant aid as does the federal government.
Myth: All students enrolled at independent colleges pay the same high tuition. (irrespective of family income).
Fact: On average, the actual amount students pay at private colleges is less than 60 percent of the total cost of tuition, fees, room and board. Students with lower family incomes pay a much lower percentage of the total costs.
The CIC states that graduation rates at independent colleges are much higher than those at public and for-profit institutions, even for low-income students. Students at independent colleges graduate much sooner (about 10 months earlier) than do their peers at public institutions and 48 months earlier than students at for-profit institutions. This all means fewer years of paying tuition and a quicker start to earning a salary; and … graduates of independent colleges are far less likely to default on their student loans.