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.