College debt holds back students, economy in RI

College student debt is rising at about 6 percent a year and reached an average of $29,400 nationwide for the class of 2012.

No secret there. Ask any graduate who is trying to make the monthly payments on his or her degree or any parent who agreed to help out with the bills.

But what may surprise you is how widely college debt varies by school, state and region and how much it impacts local economies - and all of our futures.

Rhode Island, for example, has the fifth highest student debt load in the country and the second highest average in New England, with average debt of $31,156.

Those graduates from Rhode Island colleges who hope to stay here are having a hard time finding jobs in the state's troubled economy, especially in the math, science and technology fields in which many received their degrees.

That creates a double whammy for graduates: they are struggling to pay off student loans while there aren't many well-paying jobs. That means the graduates are using whatever money they have to pay down college debt and are putting off buying a car or house, starting a business, beginning a family or putting down roots.

All that holds back the economy - at a time when Rhode Island needs more consumer spending and economic activity to recover from the long recession.

With those facts in mind, does it shock anybody that talented young graduates are leaving Rhode Island to find work elsewhere and robbing the state of its next generation of leaders?

That's the reason everyone should care about student debt.

The latest data that shows college graduates' financial burden was compiled by The Institute for College Access & Success, a nonprofit group that has been studying college loans for years. The researchers collected data from more than 1,000 public and private, nonprofit colleges and from a federal government survey of former students.

Their findings include:

71 percent of students who earned bachelor's degrees at four-year colleges in the United States in 2012 had taken out loans that averaged $29,400. That has grown from four years ago when 68 percent of students carried loans that averaged $23,450.

One fifth of the student debt was in private loans, which are typically more costly and offer fewer consumer protections and repayment options than federal loans.

Some students borrowed 10 times as much as their counterparts at other schools, with loans ranging from $5,000 to $50,000.

State averages for borrowers' debt varied from $33,649 in Delaware to $17,994 in New Mexico.

Students in the East and Midwest borrowed far more than those in the West and South.

In New England, the average student debt ranged from a high of $32,698 in New Hampshire to a low of $27,816 in Connecticut.

The average debt of students who attended Rhode Island schools grew from $26,340 in 2010 to $29,097 in 2011 and to $31,156 in 2012.

Among R.I. schools, Bryant University had the highest average student debt: $44,580, with 88 percent of students borrowing money. The average debt at the University of Rhode Island was $30,387 with 77 percent taking out loans.

The Institute's study found that in addition to the rising student debt problem, many graduates are having trouble finding work, years after the official end of the recession.

In 2012, 7.7 percent of college graduates were unemployed and 18.3 percent were either unemployed, working fewer hours than they wanted or had given up looking for a job.

They still fare better than young adults without a college degree. The study showed 17.9 percent and a bigger number of young high school graduates with no college were unemployed in 2012.

"A college degree remains the best route to finding jobs in this tight market," said Lauren Asher, president of The Institute for College Access & Success (ICAS).

So what's the answer then? How can students get the best college education that doesn't bury them in debt?

Some help may be coming from federal leaders. President Obama has proposed the development of a ratings system before the 2015 school year that scores each school's access, affordability, value and student outcomes. And just last week, a group of senators, including Jack Reed (D-RI), filed legislation to reform disclosure and servicing standards for both federal and private student loans.

Still, the real work to figure out college debt has to be done by the students and their parents.

They are the ones who have to collect and study the facts about the wide-ranging costs and debt levels for each college they are considering.

Besides the sticker price of each school, they should also study how much aid the school offers, including scholarships, financial aid and work study programs and the availability of federal student loans, rather than private borrowing.

"There's a growing awareness of the importance of student debt and there are many more tools available now for people to learn about costs, but we still have a long way to go in informing people about how to finance an education and how much it varies from school to school," Asher said.

After sifting through reams of data in the report, here's a clear conclusion to draw:

Getting to college and figuring out how to pay for it takes more work than ever before.

And even after their child is admitted and knows how much he or she has to borrow to graduate, parents aren't done yet.

They need to keep the pressure on state and local leaders, especially in Rhode Island, to create an environment in which the economy can create jobs, so their children can put their education to good use.

Otherwise, graduates will have a harder time paying off their debt, or they'll leave the state, and then we all pay the price.

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Read the complete study at: http://bit.ly/1bhwqrA