If you’re a recent college grad, or planning to graduate in the near future, you’re probably well aware college degrees don’t come cheap.
With college costs continuously on the rise, it looks like those prices aren’t set to sink or stagger anytime soon. The average Class of 2015 graduate with student loan debt expects to pay back more than $35,000, according to an analysis done by Mark Kantrowitz, a student financial aid expert and publisher of Edvisors.com.
Recent grads also have steeper interest rates to look forward to, according to an article published on cnbc.com last June. Loan interest rates can be over 4 percent and pushing up to 7 percent for federal student loans.
With in-state tuition rates and fees, room and board, the cost of books and supplies, and “personal and miscellaneous” expenses added in, undergrads at Oregon State are paying more than $26,000 for the 2015-’16 academic year. Tuition and fees for non-resident undergrads costs just shy of $45,000 for the year.
The cost of getting a college education for students paying in-state tuition rates tallies up to over $105,000—if they graduate in four years.
The average student loan debt, however, is under $15,000 for OSU students who borrow, according to Doug Severs, the director of financial aid and scholarships at OSU.
“And on a 10-year-repayment plan, that makes their payments about $270 a month,” Severs said.
The good news: OSU grads come out of college with less debt than the average American college grad. The bad news: They still have debts to repay.
Does this all mean that as college students borrow more money for their educations, and face higher interest rates as they try to pay back those debts, student loan debt could have negative impacts on the economy?
For the nation, yes. Grads sacked with mounds of student loan debt could potentially take longer to make major purchases, like buying a house or a nice car, as they try to pay off their debt. If they move on to get a master’s or doctoral degree, they presumably get deeper into debt, too.
Severs, however, doesn’t think the average amount OSU students borrow—and in turn will have to pay back—will impact the economy in a big way.
“Students could still handle that [loan payment] and save up money for a house,” he said. “We do have a few students who borrow a lot of money, but overall, if you look at the students [here], their low payments aren’t too bad at all.”
Severs also believes most state institutions of higher learning are along the lines with OSU as far as tuition goes.
Students who borrow money and drop out of college without a degree could be facing a different situation, though.
“I’m certain there are those students [at OSU], and as they work with a loan servicer, they can handle the loan debt and get back into school, or find employment to help them repay their student loans,” he said.
Even though tons of college students are digging themselves into debt as they earn their degrees, all signs point toward a college education being worth the price—and the debt.
“Information’s out there—if you have a four-year degree, you’re going to have a lot more money in your lifetime. And there’s the cultural aspect, and growth is there, too,” Severs said.
Borrow responsibly, and you’ll be in a good situation, according to Severs.
He added, “Students generally borrow responsibly, especially here at OSU. As long as we continue to educate and provide as much info to students as possible, student loan debt is not going to be a factor to cause economic issues [for them] down the road.
By Abbie Tumbleson