It’s necessary for many students to use loans to pay for the cost of their college and post-graduate education. Without at least a bachelor’s degree, it’s difficult to find solid employment, and with the rising costs of college, many students and their families aren’t able to cover the costs on their own.
While student loan debt can be necessary in many cases and a college education can have many advantages, the debt itself can create eventual problems as well. Student loan debt averages continue to rise, making it difficult for young adults to purchase homes or ever feel like they’re getting ahead financially. It’s not uncommon for students nowadays to max out federal student loan limits and have to turn to the private industry to find enough money to pay for college.
These borrowers aren’t able to move forward in their lives because of the burden of debt as soon as they leave college. Add to that the rising cost of living in many places around the country, and the majority of young people who are just starting their lives are feeling a significant and sometimes insurmountable financial squeeze.
In the decade from 2007 to 2017, which doesn’t seem like all that long ago, student loan debt has changed pretty drastically. According to a LendEDU study, in North Carolina the average loan debt went up from $17,693 per borrower in 2007 to $26,362 in 2017. That’s an increase of 49% in just ten years. This puts North Carolina at number 33 in terms of the states being ranked from lowest decade-long increases to highest.
Another troubling statistic comes out of North Carolina as well. The state is one of the worst in terms of the increase in the percentage of graduates with debt in 2007 versus 2017; specifically, North Carolina ranks 45th. In 2007, 52.16% of the state’s graduates had debt, and in 2017 that number was 59.02%, which was an increase of 6.86%.
Some of the colleges and universities in North Carolina have made more progress when it comes to reducing the needs of students to take on debt than others. Davidson College, for example, saw a decline of -27.29% in its average debt per borrower figure from 2007 to 2017. Other colleges that did well in this area include Pfeiffer University, Barton College, Duke University and Lenoir-Rhyne University.
On the other hand, Meredith College, St. Augustine’s University, High Point University, and Wingate University all saw significant increases in their respective average debt per borrower figures from 2007 to 2017.
The average debt per borrower figure at Davidson College, for example, was $28,100 in 2007. In 2017 that went down to $20,431. At the other end of the spectrum, the average debt per borrower figure at Wingate University in 2007 was $2,424 and that went up to $28,650 in 2017.
There are a lot of strategies that various states are implementing as methods to help students with debt, beyond what’s offered by the federal government.
It’s in the best interest of North Carolina as a state to work on tackling these issues, as well as for North Carolina colleges and universities to do the same. Reducing debt isn’t just important at the individual level for students, but also for statewide prosperity and a strong economy.
While some of these are already in place, North Carolina can consider offering more state-based scholarships and grants to proactively deal with the cost of education before it becomes a debt problem.
There are certain student loan forgiveness and repayment programs available in North Carolina currently. For example, the North Carolina State Loan Repayment Program provides up to $30,000 in loan assistance to mental health professionals working in certain underserved areas. This includes social workers, counselors, psychiatric nurses, and health services, psychologists. There is the NC Legal Education Assistance Foundation (NC LEAF) program which provides loan assistance to lawyers who work in public service.
North Carolina could work on expanding these options, particularly for in-demand careers, such as math and engineering, healthcare and education.
The state might also think about incentivizing private companies to offer student loan repayment benefits, which is something that’s growing in popularity as employers are having a tough time recruiting qualified talent and are looking for ways to appeal to them.
Finally, it’s also important that, as in other states, there starts to be a real focus on the cost of education, which is the core issue in the student loan debt crisis. North Carolina colleges and universities are going to have to start thinking about ways they can make the experience more affordable for students and get a handle on the out-of-control cost increases.
One way to do this is to expand need-based financial aid rather than strengthening merit-based financial aid. By prioritizing those students who need aid the most, the average student loan debt figures for the whole of North Carolina will drop as a result.
Note: You can check out the full study here: https://lendedu.com/blog/student-loan-debt-decade-comparison/
Mike Brown is a research analyst for LendEDU and the author of this report.