06.30.06

Cantwell Highlights New Report Showing More Students Leaving College with Debt

Study says debt for college grads affecting life, career choices

WASHINGTON, DC – Friday, U.S. Senator Maria Cantwell (D-WA) again emphasized the importance of initiatives to help parents save for their children’s education following a new report showing that more Americans are leaving college in debt. In 2004, two-thirds of four-year college graduates had student loan debt, up from less than one-third in 1993.

“Today, almost two thirds of our state’s undergraduates had to borrow money to pay for their education,” said Cantwell. “More students now have to borrow more money, and Congress and this administration sill want to make more cuts. I think we need to invest in American students, and should provide more help to families saving for their children’s college education.”

According to a new study released by the Democratic Policy Committee earlier this week, almost one quarter of public four-year college graduates and over a third of private four-year college graduates have too much debt to get by on a starting teacher’s salary. Rising debt levels are also causing students to delay buying a home or a car and to postpone marriage or starting a family.

Cantwell, the first member of her family to graduate from college, did so with the help of federal Pell grants. Cantwell is working to reverse planned cuts to student aid, increase the Pell grant rate, and make the $4,000 college tuition tax credit permanent. Cantwell has introduced legislation to increase by an average of $3,000 the tax benefits for families saving money for their children’s education, and to increase the maximum annual contribution to Coverdell Education Savings Account to $5,000—up from its current level of $2,000.

The rising Washington state student debt portion of a new report by the Democratic Policy Committee detailing the decline in federal support for American college students and their families follows below. To view the full report, go to http://democrats.senate.gov/dpc/dpc-new.cfm?doc_name=sr-109-2-91

The College Cost Crunch: A State-by-State Analysis of Rising Tuition and Student Debt

Prepared by the Senate Democratic Policy Committee and Senate Health, Education, Labor and Pensions Committee Democratic Staff

Washington

Despite the critical need to boost affordable college opportunities for all Americans, the Republican-led Congress continues to put college even further out of reach for millions of students. Each year millions of hardworking American families and students continue to struggle to cover college costs. But five years of Republican policies have resulted in stagnant federal grant aid, increasing numbers of students and their families falling further into debt to finance a college education, and fewer options for college graduates.

Students Have Taken on More Debt to Pay for College. More students are leaving college in debt. In 2004, nearly two-thirds of all four-year college graduates nationwide had loan debt, compared with less than one-third of graduates in 1993.6 In Washington, 61% of undergraduates took out loans to finance their college education.7 The average student graduating from a four-year college in Washington owed $17,601 on graduation day in 2004 (8).

Increased Debt Levels Are Impacting Students’ Career and Life Choices. Nationally, nearly a quarter of public four-year college graduates and over a third of private four-year college graduates have too much debt to manage on a starting teacher’s salary (9). Debt levels are also causing students to delay buying a home or a car and postpone marriage or having children (10)

Sources

6 - State PIRGs’ Higher Education Project “Paying Back, Not Giving Back: Student Debt's Negative Impact on Public Service Career Opportunities,” April 2006.

7 - Proportion of Student Loan Borrowers Among Full-Time First-Time Undergraduates at Four-Year Institutions. Calculations by the Project on Student Debt at the Institute for College Access and Success based on data from the National Center for Education Statistics (NCES), Integrated Postsecondary Education Data System (IPEDS), 2004, Data Analysis System (DAS).

8 - Average Debt of Graduates from Four-Year Colleges and Universities. Calculations by the Project on Student Debt at the Institute for College Access and Success from campus data available on www.economicdiversity.org. Includes only campuses reporting total debt through the Common Data Set initiative. Averages are weighted by campus enrollment.

9 - State PIRGs’ Higher Education Project “Paying Back, Not Giving Back: Student Debt's Negative Impact on Public Service Career Opportunities,” April 2006.

10 - Nellie Mae Corporation, “College on Credit: How Borrowers Perceive Their Education Debt – Results of the 2002 National Student Loan Survey,” February 2003.

###