As the economy continues to experience a sluggish recovery, more and more students are opting to forgo the workforce and obtain a college degree — but at a price.
A record one-in-five U.S. households now owe student loans, a Pew Research Center study announced late last month.
While the mean annual household income fell from $91,275 to $80,805 from 2007 to 2010, college attendance has increased — and so have student loans.
Richard Fry, author of the report and senior research associate at the Pew Hispanic Center, attributes these increases to the recession.
In a weak job market, a college education seems more important, he said.
“College enrollment has strongly grown since 2007 in particular, “Fry said. “We’ve got more people pursuing college.”
According to the study, 40 percent of all households headed by someone younger than 35 owe student loans. The average outstanding student loan balance for all households was $26,682 in 2010.
Fry said both the top and the bottom 20th percentiles of earners have seen the largest increases in debt.
The increased availability of loans means more affluent applicants are considering more expensive private universities, while lower income applicants are considering college for the first time.
In May 2011, a third of UNC graduates left with student debt. Among these students, the average total debt was $15,250.
“We watch student indebtedness very closely,” said Shirley Ort, UNC director of scholarships and student aid. “This amount of debt is still very manageable in comparison to our peers.
“We cannot prohibit students from taking out loans, but it is much different here. There is much more grant aid at Carolina.”
Fry said students are making more economical decisions, like shifting from private to public colleges or starting at a community college.
This shift highlights the different routes students are now taking to earn a degree.
“There is a growing debate as to what the role of college is,” Fry said. “How valuable is it, and what is the pay off?”
UNC junior Rachel Gaylord-Miles, who has $30,000 in student loan debt, has asked herself this question.
“I just hope that with all the debt I have, my education at Carolina will pay off.”
Ort said borrowing can be worth it if it leads to a good education.
“There is so much access to higher education in the U.S.,” Ort said. “As we have more access, more students are (loan) financing as their primary way to go to school.”
UNC is ranked by the Princeton Review as the best value among public colleges and universities.
Fry said that when deciding between public and private universities, students should look at their major and the institution’s potential for job offers.
“Is the Ivy really worth it?”
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