Most Graduates’ Debt Load Is Manageable

According to a new College Board policy brief,  “People think students are drowning in debt, and there is a small proportion of students that borrow an exorbitant amount, but most students graduate with a manageable debt load,' . . . bachelor’s degree recipients who did borrow, the median loan debt was $19,999, up 5 percent from $18,973 four years earlier."As was the case four years ago, about one-third of all graudating seniors have accumulated no debt at all. This link to a New York Times article; this one to the policy brief itself.

No Way Out of Ocean of Debt for US Colleges

A financial magazine's look at the credit and debt burden crisis for US institutions, with an eye toward enrollments, and using specific examples from Simmons' College' School of Management, which is characterized as "all but deserted."

Simmons followed suit as US colleges jacked up tuition by an average of 3 percent above inflation every year. It counted on a rising endowment, parents' bull market-fed wealth and burgeoning private loans that more than doubled student debt from 1998 to last year.

It raised annual tuition and living expenses to $41 500 last year, 22 percent above the $34 132 average for private colleges. Sarah Lawrence College in Bronxville, New York, the costliest US school, charged $53 166 last year.

Then credit markets collapsed. Simmons - and even better-known schools such as nearby Boston University - felt the aftershocks.

Like many now-struggling companies and municipalities, Simmons had sold variable rate bonds and hedged against rising interest rates through swap agreements, which fixed interest costs for the school.

When rates fell, Simmons owed more than $10m on the swaps. When it refinanced the bonds, it had to accept more than triple the interest rate it had been paying before the credit crisis.