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Are Student Loans Inevitable?

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We have been conditioned to think that student loans are inevitable. A necessary evil for today’s college student. But yesterday’s New York Times article on student loan debt has an optimistic message: One out of three students earn their BA degree with no student debt. That’s right — one-third of all undergrads will get through their degree without owing a penny in student loans, according to a new survey conducted by the College Board.

So what’s that we keep hearing about how all students are drowning in student loan debt? According to one of the College Board’s researchers, Sandy Baum:

People think students are drowning in debt, and there is a small proportion of students that borrow an exorbitant amount, but most students graduate with a manageable debt load.

Here are the stats:

  • 34% of Bachelor’s degree graduates, and 41% of two-year degree holders had no debt upon graduation.
  • The median student loan debt among those who did borrow was just under $20K, up 5% from the previous survey conducted five years ago.
  • The total student debt for all non-graduate students (including those who had 0 debt) was $15,123, up 11% from 2003-2004.
  • 10% of BA graduates (and 6% of those earning a two-year degree) had more than $40K in student loan debt upon graduation * Whether you borrow (and how much) seems to depend on the type of school you attend. 98% of student at a for-profit two-year college took out student loans, while only 38% of students at a public two-year college did.
  • Borrowing also seems to be related to whether you go to school full-time or part-time (which makes sense, since most full-time students have less time to work). 50% of full-time students took out loans, including 19% who took out private student loans in addition to federal loans.

If you want to learn more about your options, be sure to check out the Financial Aid Finder’s articles on College Student Loans.

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