10 Truths Students Need to Learn about College Debt

By Jennifer Kunze, Ph.D.

Director of Ramp-Up to Readiness

College debt has been everywhere in the news as of late and students likely have a lot of questions about it.  They will need to understand some basic facts about the college debt situation in order to make wise and informed postsecondary plans for themselves:

1.    College costs have soared in the last few decades. In fact, the cost of four-year public and private college and public two-year school has risen drastically.

2.    While costs have increased, federal financial support for students through Pell Grants has dwindled.  For 50 years the federal Pell Grant program has been the mainstay of financial assistance for students from low and moderate-income families, helping millions go to college.

3.    Due to increased costs and less support for Pell Grants, students have had to borrow more money if they want to get a degree.

4.    According to data reported to U.S. News by 1,047 colleges in an annual survey, grads from the class of 2021 who took out student loans for their bachelor's degree borrowed $29,719 on average.

5.    Heavy debt can cause many borrowers to put off investing in their own wealth through buying homes, starting small businesses, and saving for retirement.

6.    Almost one-third of all borrowers never finish their degree due to inability to pay the cost of attendance. About 16% of borrowers are in default – including nearly a third of senior citizens with student debt – which can result in the government garnishing borrowers’ wages or lowering a borrower’s credit score. 

7.    Not all college grads accumulate the same amount of debt. Some colleges’ students incur heavier debt loads. Look here for a list of the 10 colleges whose grads incur the most student loan debt.

8.    For-profit colleges enroll 10 percent of students nation-wide, but they account for half of all student loan defaults. Numerous studies have found, in addition, that the earnings and employment rates of for-profit college graduates are lower than those of public college and non-profit college graduates. 

9.    Students can and should research typical total debt after college graduation by school.  There is great variance.

10.    Students going to college should finish their degrees as quickly as possible. The longer students attend, the more they pay.

Going to college is still a fabulous bet. Earning a postsecondary degree remains the best way to achieve economic and social mobility. In addition, there is no shame in borrowing for college. Students, however, ought to think carefully about which school they will attend and how likely they are to graduate on time and to incur large amounts of debt that would be difficult to repay. Finally, when choosing a major, students may want to consider which careers and salaries will allow them to repay their loans as quickly as possible.

Students desperately need this critical information, so please share these 10 truths with students in your life! I never want finances to be a barrier to students who want to earn a college degree.

About the Author
Jennifer Kunze, Ph.D., is the Director of Ramp-Up to Readiness™ at the University of Minnesota—Twin Cities. Ramp-Up is a grades 6 – 12 college and career ready curriculum that strives to make sure all students have an equitable opportunity to achieve social and economic mobility through higher education—whether it be at a two or four-year college, a trade school, or an apprenticeship.