By Dalton Karwacki
In spite of the increasing cost of attendance, Rider students have been graduating with a fairly constant level of debt, according to Director of Financial Aid Dennis Levy.
The average debt of a Rider student upon graduation has increased by just over 1 percent since 2008, Levy said. In 2008, the average student debt was about $33,000, while in 2010 the average debt was about $35,000. Levy said that Rider has made a conscious effort to keep debt levels steady.
“In recent years, the Office of Financial Aid has been pushing a clear message to students about responsible borrowing,” he said. “Additionally, Rider has tried to moderate the annual tuition increases and has also increased scholarship opportunities for new and continuing students.”
The cost of a Rider education has risen by 4.9 percent each year for the past three years. Last year, nationwide tuition costs went up by 8.3 percent, according to the College Board Advocacy and Policy Center.
According to the Project on Student Debt’s (PSD) report, “Student Debt and the Class of 2010,” the average debt level nationwide was $25,250, a 5 percent increase from 2009, a number that includes both private and public institutions from across the country. The report said that the annual increase had been fairly steady for several years.
“The 5 percent increase in average debt at the national level is similar to the average annual increase over the past few years,” it said.
The national average at private institutions, like Rider, was about $28,000 during the 2007-08 academic year, according to the PSD. Levy said that there are several reasons that Rider’s average debt was higher than the overall average.
“Rider’s investments in providing a high quality education and the higher cost of living in the Northeast, which directly impacts family resources available to meet college costs, are among the factors contributing to borrowing levels at Rider,” he said. “The other factor is the reduced state aid that our students are receiving during a difficult economy, which has left more families dependent upon loans in order to stay enrolled at Rider.”
In New Jersey, the average student debt, taking into account public and private institutions, is just under $24,000, according to the PSD report.
Students from Monmouth University, a similarly sized private institution in New Jersey, graduated with an average of about $30,000 last year, according to the report. An education from The College of New Jersey, a public institution, left students with an average of about $27,000.
According to Levy, the averages do not tell the whole story about average student debt.
“Reporting data on student debt is not mandatory,” he said. “Nationwide, only 55 percent of private nonprofits provided data used in the PSD study and other publications.”
The percentage of Rider students graduating with debt is lower than the national average for private nonprofit institutions, Levy said. Last year, 71 percent of Rider students graduated with debt, a 3 percent decrease since 2009. Nationwide, the number was 72 percent.
In order to help students deal with rising debt levels, President Barack Obama introduced a series of proposals aimed at lessening the burden. These proposals, announced by Obama at the end of October, would make several alterations to the way the federal Income-Based Repayment (IBR) plan works. For those who qualify, the IBR caps monthly payments to a percentage of discretionary income, currently 15 percent. After 25 years, any remaining balance is forgiven. Qualification is based on family size, annual income and debt amount.
“The proposal will benefit those students who qualify for IBR plan by reducing monthly loan payments, canceling remaining debt and making loans more affordable,” Levy said
Last year, Congress voted to set the IBR to its current payment amount and forgiveness period with the payment amount scheduled to decrease to 10 percent of discretionary monthly income in 2014. Obama’s proposal would lower the payments in 2012 instead and would forgive the debts sooner.
“President Obama is proposing to have the 15 percent to 10 percent reduction occur sooner than 2014,” Levy said. “He is also proposing to cancel remaining debt after 20 years and not the current 25.”
Student aid has been cut by $30 billion in the past year, David Warren, president of the National Association of Independent Colleges and Universities (NAICU), wrote in an email to NAICU members.
“The student loan programs have been particularly hard hit, and even low-income students are seeing a sharp decline in the terms and conditions of their loans,” Warren wrote. “Summer Pell Grants were eliminated, as was the Leveraging Educational Assistance Partnership (LEAP) program which incentivized states to maintain funding for need-based student grants.”
In his message, Warren noted that NAICU will work with members of both parties to protect student aid programs. He also asked that as many people as possible sign a statement of support with the Student Aid Alliance, a group of 62 higher education organizations dedicated to preserving federal student aid. The statement of support can be found on the Alliance’s website, www.studentaidalliance.org.
“At the same time, though, it is important that elected officials are reminded how many Americans’ lives are improved by a college education,” he wrote. “To that end, we are mobilizing the Student Aid Alliance. The Alliance is a broad coalition across the entire higher education community, which NAICU was instrumental in founding.”