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NC State Economist Dr. Mike Walden – “Digging into Student Debt”

 

Mary:  I’m Mary Walden with economist MW, welcoming you to the economic perspective.  Today’s program digs into student debt.  Mike, college student debt continues to climb and be an issue.  In fact, student debt was the only major borrowing type to increase during the recession.   Give us some background on the issues surrounding student debt.

Mike:  Summary Answer

  1. Of course, has become more of an issue as larger proportions of high school grads go on to college – reflecting the changing job market
  2. And college has become more expensive – can argue because demand is increasing faster than supply – but big debate here
  3. About 70% of students graduate with less than $30,000 in debt – which is still manageable in light of $20,000 higher annual salary for college grad over high school grad
  4. But still 30% of college students end up with more than $30,000 in debt
  5. College loan default rates are actually lower today than 25 years ago
  6. They did rise during the recession and haven’t yet turned down
  7. Default rate for 4 year public college stands at 7% today; for 2 year public college is 14%
  8. I’m MW

Mary:  And I’m Mary Walden for the North Carolina Cooperative Extension Service