College graduates are defaulting on loans more than ever, according to a new report, and the reason may be linked to the college.
The report this week by The Wall Street Journal revealed 67 percent of college grads are weighed down by student loan debt. The report pointed out that students in the worst situations typically graduate from
liberal arts and specialty colleges.
According to the newspaper's analysis of new U.S. Department of Education data, the average college grad has an annual salary just shy of $40,000, yet owes about $21,500 on their college loans and has an average debt payment of $248 a month.
Shippensburg student Carla Johns was touring HACC's main campus Thursday in order to save money. Johns already understands paying loans will be an uphill battle.
“Bills gotta get paid, my food…you gotta do all that other stuff, so then I feel like student loans kinda take a backseat,” said Johns.
What Johns didn't know is that HACC made a list of schools that received an “F” when it came to a comparison of graduation and loan default rates.
According to the Education Department data, the average cost of HACC tuition in 2011 was $8,435 and the average student debt was $9,500. HACC's graduation rate was 12 percent and its student-loan default rate was 13 percent.
Tuition at Harrisburg University of Science and Technology for 2011 was $13,241. Students borrowed an average of $11,687. Their graduation rate was 9 percent, and the student-loan default rate was a whopping 19 percent.
ITT Technical Institute in Harrisburg didn't fair much better. Tuition was $21,054 in 2011. Students borrowed an average of $16,500. Their graduation rate was 36 percent versus a 34 percent loan default rate.
The figures do not do much to inspire courage in full-time HACC student Kelly Gallo. The nursing student hopes her profession of choice will help in the long run.
“It's the most I've ever owed anybody,” said Gallo. “When I get out, it's going to be a big chunk.”
Most state and private schools in central Pennsylvania received an “A” for their graduation versus student-loan default rate. Millersville, Shippensburg and Messiah College had graduation rates in the mid-to-high 70 percent range, while their student-loan default rates were in the low single digits.
Gettysburg College was among the best in this category. Tuition for 2011 was $27,591 and students borrowed an average of $19,395. Their graduation rate topped out at 85 percent, compared to zero defaults on student loans.
The Wall Street Journal pointed out that the federal figures still need to be tweaked so a full comparison can be made. Another report is expected to come out later this year.
The Department of Education plans to come up with a tool to compare colleges by their tuition, debt loads, and how much students typically make after graduation.
For now, Gallo hopes everything will fall in place.
“The biggest concern is not graduating and still owing the money,” she said with a laugh, “but I don't plan on doing that.”