Message from SCICU President and CEO Jeff Perez –
When it comes to student loans, there are some big, frightening numbers thrown around, like $1.5 trillion in total outstanding debt and 45 million student loan holders. We even hear it’s a national crisis.
But let’s break it down a bit. I used data from credible.com and the federal government to work through four of the student loan myths you may hear:
Myth #1: Student loans are out of control.
Reality: Some of those big numbers you see contain graduate school loans, and those students take out the big loans because they can confidently anticipate getting paid the big bucks – average grad school student loan debt is $84,300. In fact only 6.2% of borrowers owe $100,000 or more, but they constitute about one-third of the total outstanding debt. That’s $500 billion! On the other end nearly 36%, more than one-third, owe less than $10,000
Myth #2: Every student takes out a loan.
Reality: Looking at the statistics provided by the federal government at collegescorecard.ed.gov, the median percentage of students at SCICU member institutions who take out loans is just over two-thirds, at 69%. That’s certainly a large number, but almost one-third – or 9,300 students – don’t have student loans. And the average debt of $26,943 is well below the national average for private colleges, $32,600.
Myth #3: A college education is not worth the student loan.
Reality: This is the most pernicious falsehood, considering the return. If I were to suggest you take out a loan to invest about $27,000 that, according to the U.S. Census Bureau, will pay back about $1 million over the next 35 years, I bet you’d do so. And that’s just what an education at our institutions is worth compared to those who don’t earn a college four-year degree.
Myth #4: Student loans are the largest source of financial aid.
Reality: Our SCICU institutions provide more support through scholarships and grants than any other source, including student loans. Fully $300 million comes from our colleges and universities to support their students. Many thanks to those individuals, organizations, and corporations whose generosity makes this support possible.
My point is not to diminish the serious decision of taking out student loans nor that they can impose a serious burden on individuals and families. However, we must not lose sight of the fact that SCICU institutions are in the business of equipping their students for rewarding futures. Attending them is a smart investment.
And on behalf of the SCICU staff, let me wish all of you a very Happy Thanksgiving.