How to Graduate With Six-Figure Debt
The cost of education continues to rise, and students and families continue to borrow … and borrow … and borrow.
(Photo Credit: Andrew Magill/Flickr)
Looking at statistical data helps to paint a picture of what is happening in higher education, who can afford to be educated, and just how attainable education really is.
As pointed out in CBS Moneywatch’s piece, College Students Who Borrow Too Much – 13 Facts, those who graduate with six-figure debt are much more likely to have completed a graduate degree. While this makes sense, more years in school equals higher debt, it should not discourage students who have goals that require a professional degree. With any luck, the income-earning potential for those with graduate degrees is high enough to make paying down the debt a realistic goal.
PayScale’s ROI rankings are a great help to students trying to decide if they really will be able to pay off what they borrow.
CBS Moneywatch claims that after the 2007-2008 school year, 49 percent of medical students and 36 percent of law students graduated with six-figure debt. However, less than three percent of MBA students graduated with six-figure debt.
Undergraduates With High Debt
It may come as no surprise that undergraduates at private schools were 12 times more likely to graduate with six-figure debt than their counterparts from public universities. However, 24 percent of undergraduates with six-figure debt came out of public universities.
It is interesting to note that students from families with more income were more likely to graduate with six-figure debt.
Loans and Financial Aid
Students who used private loans to pay for college were more likely to bear the burden of six-figure debt after graduation.
Students are well advised to turn to FAFSA before looking for other ways to fund college. FAFSA is need-based, which may contribute to the statistic that students from higher-income families end up with more debt.
Credit unions almost always offer better interest rates than banks. Check to see if your college or university has its own credit union, and apply for a loan there.
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