This document discusses student loan debt accumulated by college students. It finds that total student loan debt outstanding is over $800 billion, with average debt between $20,000-$150,000. Interest rates range from 4.5-6.8% and the national default rate is over 8%. The rising cost of tuition is increasing the amount students borrow. This debt burden impacts students' ability to find jobs and make payments after graduation. The document recommends colleges provide specialized student loan offices and mandatory financial literacy education to help students better understand and manage their debt.

1. UNDERSTANDING THE STUDENT
LOAN DEBT STUDENTS
ACCUMULATE IN COLLEGE
Wendy M. Knight
Graduate Research Day
May 2, 2014

2. DISCUSSION POINTS
 Purpose
 Significance
 Findings
 Importance in Higher Education
 Implications for Student Affairs Professionals
 Recommendations
 Conclusion

3. PURPOSE
 The purpose of this study was to understand the
student loan debt students accumulate in college

4. SIGNIFICANCE
 To aid student affairs professionals in
understanding the student loan debt students
accumulate while in college
 To give understanding to student affairs
professionals the current interest rates on the
student loans, payback options, and the effect on
graduating seniors and job searches
 To find ways to address and potentially avoid the
student loan debt issue

5. FINDINGS
 The total amount of student loans outstanding
was over $800 BILLION dollars
 $300 billion was acquired between 2006 – 2010
 Interest rates are between 4.5% - 6.8%
 Average student loan debt (as of 2010) was
between $20,000 to $150,000
 First year undergraduate eligibility $3,500 - $9,500
 Second year undergraduate eligibility $4,500 - $10,500
 Third year and beyond undergraduate eligibility $5,500 -
$12,500
 Graduate or professional studies $20,500

6.  National default rate was over 8%
 Department of Education offers four repayment
plans; standard, extended, graduated, and
income-contingent
 The rising cost of tuition and the decrease in
grant funding is increasing the amount of loans
students are taking out

7.  College graduates are not finding employment, or
taking a mismatched job
 More college graduates are moving back home
after graduation
 More students are struggling to make their
monthly payments and are either applying for a
forbearance or going into default
 College graduates are being taken out of the
purchasing market because of high student loan
debt

8. IMPORTANCE IN HIGHER EDUCATION
 A high default rate at an institution can result in
loss of federal funding
 The value of education vs. the loan debt
 Access to higher education seems impossible to
some based on high tuition and fee rates
 Less degree seeking students may have a long
term effect on job market and the economy

9. IMPLICATIONS FOR STUDENT
AFFAIRS PROFESSIONALS
 Decreased retention rates
 Value of education questioned
 Dealing with the student in shock of the amount
of student loans acquired while attending college
 The higher stress level of a student who is aware
of the debt he or she has accumulated

10. RECOMMENDATIONS
 Each college/university or lending institution
should have a specialized office on campus which
deals with student loans, past and present
 Mandated yearly meetings with the students so
they are aware of their current balances owed –
being updated on what expected monthly
payment will be
 Mandate financial literacy classes to students, at
least once a year as informative or refresher

11. CONCLUSION
 Current loan debt is a burden to students leaving
college, either by graduating or not
 Most students are unaware of their student loan
debt until they leave school
 Without a specially designated office with
knowledgeable staff students will not have a
place to go to get their questions answered
 The rising cost of tuition and fees is making
access to higher education almost beyond reach

13. REFERENCES
Gast, S., & Glickman, J. (2011, September 12). Default Rates
Rise for Federal Student Loans. Retrieved December 3, 2011,
from ED.gov: http://www.ed.gov
Historical Interest Rates. (2011). Retrieved December 3, 2011,
from FinAid! The SmartStudent Guide to Financial Aid:
http://www.finaid.org/
History of Student Financial Aid. (2011). Retrieved December 3,
2011, from FinAid The SmartStudent Guide to Financial Aid:
http://finaid.org
Hobijn, B., Gardiner, C., & Wiles, T. (2011, March 21). Federal
Reserve Bank of San Francisco. Retrieved December 3, 2011,
from FRBSF Economic Letter: http://frbsf.org
Kamenetz, A. (2010, August 11). Huff Post College. Retrieved
December 3, 2011, from Huffingtonpost.com:
http://www.huffingtonpost.com/anya-kamenetz/830-billion-in-
student-lo_b_679497.html
Khalfani-Cox, L. (2011, April 14). Student Loan Repayment
Options for Federal and Private Loans. Retrieved December 3,
2011, from Daily Finance: http://www.dailyfinance.com

14. REFERENCES CONTINUED
Lucas, D., & Moore, D. (2007). Guaranteed vs. Direct
Lending: The Case of Student Loans. Measuring and
Managing Federal Financial Risk, (p. 43). Evanston.
Not Just for the Elite A History of College Student Loans in
America. (2008, March 15). Retrieved December 3, 2011,
from Random History: http://www.randomhistory.com
Occupational Outlook Handbook, 2010-2011 Edition. (2010,
December 3). Retrieved December 3, 2011, from United
States Department of Labor, Bureau of Labor Statistics :
http://www.bls.gov
Special Direct Consolidation Loans. (2011, November 16).
Retrieved December 3, 2011, from Student Aid on the Web:
http://studentaid.ed.gov
The History of Student Loans – Financial Aid for Economic
Competition. (2011). Retrieved December 3, 2011, from
Financial Shopper Network: http://financial-shopper-
network.com
Toby, J. (2009). Using Carrots and Sticks to Improve
American Colleges. Social Science and Public Policy , 42-
47.