The Sacred Cow of College Education

The following facts and figures are based on the Project on Student Debt’s analysis of data from the National Postsecondary Student Aid Study (NPSAS). Conducted by the U.S. Department of Education every four years, NPSAS is a comprehensive nationwide survey designed to determine how undergraduate students and their families pay for college.

The data from academic year 2007-08, recently updated this month, show continued increases in student loan borrowing. Wow what a big surprise.

Private for-profit colleges saw the largest recent increase in the proportion of students graduating with debt. In 2004, 65% of students graduating from all four-year colleges and universities had student loans. At public universities, 62% graduated with debt; at private nonprofit universities, 72%; and at private for-profit universities, 85%.

In 2008, 67% of students graduating from four-year colleges and universities had student loan debt. That represents 1.4 million students graduating with debt, up 27% from 1.1 million students in 2004.

• 62% of graduates from public universities had student loans.


• 72% of graduates from private nonprofit universities had student loans.


• 96% of graduates from private for-profit universities had student loans (a major increase from 2004, when 85% of these graduates had student loans).


• Average debt levels for graduating seniors with student loans rose to $23,200 in 2008 — a 24% increase from $18,650 from when they began as freshmen in 2004.

At public universities, average debt was $20,200 — 20% higher than in 2004, when the average was $16,850.
At private nonprofit universities, average debt was $27,650 — 29% higher than in 2004, when the average was $21,500.
At private for-profit universities, average debt was $33,050 — 23% higher than in 2004, when the average was $26,850.

Meanwhile, employment prospects for young college graduates have soured along with the economy. The unemployment rate for college graduates aged 20-24 was a challenging 7.6% in the third quarter of 2008, the highest third quarter rate since 2002 - before we were even talking about the Great Recession. By the third quarter of 2009 - one year later - it had risen to 10.6%, the highest on record. The majority of the class of 2008 fell into this age group in both years.

I’ve seen reports that for the most recent graduating class – 2009 – the unemployment rate hovers round 25%.

So let’s see if I have this right:

1. We told our kids to make sure you get a college education; it’s your ticket to a successful life – even if it means eating at a food bank.


2. Now that they have graduated, the job prospects are bleak because of the economy and because they’re competing with a zillion other people with work experience and not just academic experience.


3. They’ve added a huge monthly loan payment to pay for this education just as they are trying to figure out how to move away from home, begin an independent life, and start to define themselves as an adult.

But don’t worry – the colleges and universities all got paid.