steven brooks executive director state education assistance authority paying for college in north...
TRANSCRIPT
Steven BrooksExecutive DirectorState Education Assistance Authority
Paying for College in North Carolina: Perspectives on Student Loan Debt and College Affordability
What we constantly hear about college...
College costs too much, delivers too little [Orange County Register]
College Costs Out Of Control [Forbes]
America’s Trillion Dollar Student Loan Train Wreck [Sense on ¢ents]
Student Loan Debt: $1 Trillion and Counting [Forbes]
Student loan debt nearing $1 trillion threatens recovery [NY Daily News]
Real Questions:
– Are there really lots of students with debts of $75,000?
– Are students borrowing more or are more students borrowing? Or both?
– What are average debt levels and how are they changing?
– What is really happening regarding college costs and financial aid in North Carolina?
Student Loan Debt: National Context
Nationally, of all students who entered college in 2003-04...
– 43% have no federal Stafford Loan debt– 25% have debt under $10,000– 16% have debt between $10,000 and $20,000 – 16% have debt over $20,000
8% > $20,000 - $29,9998% > $30,000
2% > $50,000 1% > $75,000
1% 1%
5%
8%
16%
25%
43%
> 75,000$50-75,000$30-50,000$20-30,000$10-20,000$1 - 10,000No debt
National Average Total Debt LevelsBachelor’s Degree Recipients
Public Four-Year Colleges and Universities in 2011 Dollars
National Average Total Debt LevelsBachelor’s Degree Recipients
Private Nonprofit Four-Year Colleges and Universitiesin 2011 Dollars
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011200,000,000
400,000,000
600,000,000
800,000,000
1,000,000,000
1,200,000,000
377,585,150
401,635,740
451,515,194
501,018,732
564,868,203
597,589,475
615,762,297
689,029,659
820,603,970
987,760,166
1,079,620,657
+ 186%
Student Borrowing: North Carolina
Total Dollars Borrowed for Stafford Loans
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 201150000
100000
150000
200000
250000
300000
118,124
125,785 139,480
150,697159,982
176,651178,961
189,402
206,314
251,344
281,720
+139%
Student Borrowing: North Carolina
Total Number of Stafford Loan Borrowers
2006 2011 % Increase
North Carolina $17,760 $20,800 17%% Graduates With Debt 54%
United States $19,646 $26,600 35%% Graduates With Debt 66%
Percent NC Average Debt Under National Average 10% 22% 52%
Student Borrowing: North Carolina
Average Debt at Graduation for Bachelor’s Degree Recipients at
North Carolina Colleges and Universities
2001 2011 % Increase
University of North Carolina $2,134 $4,956 132%
Community College $909 $1,854 104%
Private 4-Year College or University $12,497 $23,341 87%
College Costs: North Carolina
Average Tuition and Fees at North Carolina Institutions
Estimated “Sticker Price” - Entering Fall Semester, 2012 Tuition, fees, room, meals, books, supplies, transportation and personal
expenses
How Much Will It Cost?
2012 2013 2014 2015 Total
Community College 14,500 15,225 29,725 UNC Campus 18,950 19,898 20,892 21,937 81,677 North Carolina Private 34,000 35,700 37,485 39,359 146,544 Out of State Public 34,000 35,700 37,485 39,359 146,544 Out of State Private 42,224 44,335 46,552 48,880 181,991
Cost estimates are unweighted averages, inflated at 5% per year
2001 2011 % Increase
Need Based State Grants $60 $329 448%Pell Grants $185 $953 415%
Subsidized Stafford Loans $213 $535 151%Unsubsidized Stafford Loans $165 $544 230%
Financial Assistance: North Carolina
Total Student Financial Aid Awarded(in millions, rounded)
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College costs can be daunting … but
There are four ways to pay for this investment
– Saving in advance
– Paying from current income
– Borrowing – pay with future income
– Scholarships and Grants
Costs do not have to be paid all at once
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Observations on the four ways to pay
It is less expensive to save than to borrow
– Those who do not save have to borrow more– Current income can cut borrowing costs as well– Some level of sacrifice – at some point – will have to be made
(sooner, now, or later)– Need-based grants and scholarships are designed to provide
the amount that the family and student cannot reasonably afford over time
Most families use a combination of all saving, borrowing and current income to pay their share of college expenses.
So, what should the headlines actually say?
• Student loans should be approached cautiously, but for the vast majority they provide access to higher education.
• College costs a lot, but it is worth it, and financial aid lowers the cost for those who need help.
• College Works! Research shows that college graduates have– Greater wealth– More financial security– Better health– Stronger community– Closer family
–For more information please see http://www.cfnc.org/static/pdf/paying/pubs/pdf/pdf/5WaysBro_Eng.pdf