77,552 Of Graduating College Seniors Have $40,000+ In Student Debt

This graph from GOOD and FutureFarmers shows the number of graduating seniors with more than 40,000 in student debt by 2004.

A variety of factors could be at play, including the rising cost of college and more people going to college. But consider the cost increases thanks to the aggressive marketing of private student loans (a practice for which the NY AG sued several colleges and banks), which often carry higher interest rates than federal student aid. Many students turning to private loans haven’t used of their full quotient of federal Stafford, Perkins, and PLUS loans, which have capped interest rates and are guaranteed against default.

Student Debt [GOOD]
RELATED: Shop Around for Student Loans

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  1. SaveMeJeebus says:

    Only 77.552 college graduates? Was the study done at one school?

  2. Ben Popken says:

    @SaveMeJeebus: Oh, the title should say that it’s graduating college seniors, not total graduates.

  3. popken, we need to ween you off of pretty looking graphs

  4. freshyill says:

    Sucks to be them. Enjoy making $28,000 with 3% raises for the next five or 10 years. Maybe next time they’ll go somewhere less expensive.

  5. Anonymous says:

    77552 out of how many total?

    Its more useful to know the total student population for each year this data is taken since student population is not constant.

  6. Munsoned says:

    Shouldn’t the bigger balloons (to the right side of the graph) make the same-sized stick figures they’re carrying soar higher, not lower?

  7. PsychicPsycho3 says:

    @jrstren: Perhaps they’re lead balloons…

  8. MonkeyMonk says:

    Good has proven to me that they’re very talented at drawing pretty graphics and very untalented at creating charts with meaningful statistics.

  9. pinkbunnyslippers says:

    Private loans are being “aggressively marketed” because some of us never were able to qualify for federal loans, or the loans we *did* qualify for weren’t enough to pay for our total education.

    My parents made too much to get financial aid, but not enough to just send me out to college on their own. It’s a sucky situation to be in, but it’s the truth. Don’t blame the students for choosing an expensive institution – the grant program in this country should be revamped.

  10. nweaver says:

    THat is one of those useless graphs which wouldn’t be out of place in USA Today (aka McPaper).

    What atrocious chartjunk.

  11. mantari says:

    I found this infographic to be confusing. I was unable to break things down into their components.

  12. azntg says:

    Up, up and away on my beautiful balloon!

    Year 2 in a four year college. My debt from loans? $0.00. I’m happy I’m not in that camp!

  13. QuantumRiff says:

    I am in that catagory (but I graduated 2 years ago) I had to reconsolidate with a 25 year repayment. I already pay more than the minimum, and plan to increase it every couple years, but its sad to think that my fiancee and I are talking about having kids soon after we get married, and I could still be paying off my loans while I am paying for my kids schooling..

  14. kpfeif says:

    - reduce your college costs (think community college)
    – get a job during school to pay for it or some of it
    – make sure you can actually GET A PAYING JOB with whatever your degree is

    Why should the country pay anything for college costs?

  15. Usermanual says:

    In 5 days I will be sending Sally Mae my very last loan payment check. I will have paid off $45K in student loans in 3 years!

    People think my wife and I (we’re 26) are completely crazy to have paid them off so soon, but they are poor so who cares?

    I would not have taken the loans out had I known then what I know now about money and debt. I was just doing what got me into and out of college ASAP. What’s really funny is I have Sally Mae sending me letters monthly encouraging me to go back to school “on their dollar”.

  16. BloggyMcBlogBlog says:

    I predict the education bubble will burst in the next ten years much like the housing bubble did. My college’s expenses doubled in the less than ten years from which I graduated.

  17. savvy9999 says:

    @kpfeif: Are you serious?

    In any case, these are LOANS, not grants.

  18. SaveMeJeebus says:

    @kpfeif: You don’t even have to go to a 2 year community college. A lot of public universities will run <$25K for four years.

    Students just rack up debt by being a junior and still undeclared or changing majors every semester and needing more classes. My sister-in-law just signed the papers and never thought about how much it was costing and $38K in debt later she is now a schoolteacher. She’ll be paying for at least 10 years.

    Make sure your degree has good entry level money-making possibilities AND demand in the current job market.

  19. frogpelt says:

    High school seniors have been tricked into believing that a degree from Yale was better than a degree from a lesser-known, lower-tuition-cost institution. Most companies would rather hire someone from a smaller school who is a hard worker than someone who thinks they are smart simply because their degree is “prestigious”.

    My advice: go to a local university and work hard. Your student loans will be significantly less and your job opportunities will be probably be greater (meaning you can pay off the loan quicker). Lots of companies will even offer a signing bonus to help with student loans.

  20. ry81984 says:

    I only have $25,000 in debt after 5 years at Purdue.
    But that really is not a big deal as I will get between $40K and $50K after graduating (higher in a cities like Chicago or New York) with great opportunies for advancement by promotions or switching companies.

    It does suck if your going to be a teacher though. For some reason one of the most important jobs in our society is the worst paid.

  21. yg17 says:

    @pinkbunnyslippers: Same here. I’ll be somewhere in the neighborhood of $65k when I graduate in May. No fed loans for me, all private :(

    I went to a public, state university and get in-state tuition which is about 10 grand a year, depending on how many credit hours I’m taking. Now add in books, dorm room and forced meal plan (both expensive and required for fresh and soph year, the school knows how to make money) and rent and living expenses for the last 2 years, and it gets expensive.

    But I’ve decided that in the end, it will be worth it. Even if I’m paying the loans off for 20 years (I hope not). I’ll have a good job when I graduate that will pay more than any job I could find without a degree.

  22. Snarkysnake says:

    Amen to KPEIF …

    I want some one to write in and tell me what good a 4 year degree from a “name” school does you when you start off your working life 70-80-90- K (or more) in debt…If you stretch that out over 25 years (like one of the writers above),you are literally paying for that degree two or three times…Makes no sense to me when you can in most states attend a 2 year community college that will allow you to accumulate credits that will transfer to the degree program of your choice at that states university.(Indeed,in Georgia,where I live, the state CC’s DESIGN their programs to make a seamless transition to the state 4 year programs).You (or your parents) have /are already paying for this parallel system of schools through your taxes,so why not use it ? Do you really want to be a slave to Citibank,Bank of America or what have you for 10-20-30 years ?
    And another thing. When I went to school a long time ago,in a galaxy far,far away,it was standard procedure to take out a student loan and when the going got tough,just doing the ‘ol blue collar two step and going chapter 11 (or 7).No more.Now, you just about have to have a terminal illness to discharge one of these federal bear traps. So no matter what the slick ads with hip,cool ACTORS tell you,these jumbo student loans are poison.

  23. chili_dog says:

    College, even at a 2nd or 3rd tier school is expensive. So much so it’s almost impossible to attend without loans. I know, I’m in that boat.

    But on the other hand, the cost goes up every year for literally nothing more in the product that is delivered. With few exceptions where high dollar equipment is required, why in the hell does a business class cost $600 bucks.

  24. chili_dog says:

    Oh and another thought, just wait to add on that MBA. Talk about expensive.

  25. SaveMeJeebus says:

    @yg17: Those add-ons are no joke. I didn’t really think about that when I said most public universities are under $25K. My wife’s mealplan at St. Edward’s University was almost $2K/sem. They sold cases of water for $30 and boxes of 6 Pop-Tarts for $12. They had a chef there who would cook pasta and crap for you on the spot–I can just imagine how much that went for. Her genius father cosigned some private loan for her with a ridiculous interest rate that we will be paying off for a while.

  26. rbb says:

    That graphic is horrible. I suggest you get to a seminar conducted by Edward R. Tufte, stat!

    The area of the 77,752 balloon is over 10 times the volume of the smallest balloon (45,000?) but is only 1.7 times the number of people in the smaller ballon. So, the size of the balloon is totally misleading and irrelevant.

    Using a vertical measure, from the top of the balloon to the bottom ofthe chart, the largest balloon is over twice the height of the smallest balloon. Yet, the largest balloon DOES not represent over twice as many people as the smallest balloon. So, vertical height is totally irrelevent.

    And what’s with the people hanging from each balloon? Do they represent anything? No Y scale either.

    Total Chart Junk!

  27. rbb says:

    Sadly, increasing the availability of low cost loans, grants, etc. only raises the costs of tuition. Colleges increase their tuition rates to take all of the available money/credit you have.

  28. crnk says:

    @Snarkysnake:
    Have you ever thought that some programs don’t ALLOW transfers and in some fields, a crappy 2yr won’t do anything (except get you a job a mcdonalds…or maybe running copies at the office)
    People need to get off their high horse sometimes and realize that a 2yr just can’t possibly work for a fair amount of people (unless you just want to add 2 years to your time in school). Also, I don’t think I know ANYONE who has had all credits transfer from anywhere.

    And if you’re also thinking that a degree doesn’t pay that much–you should look at the firm I was at for the last year. Possibly one of the most well paid firms in the country for the field, we did great work, only took jobs we wanted….and most everyone had a degree or more from a private prestigious school or had attended one of the very best public schools for that work in the country.

  29. vanilla-fro says:

    Did you get help with that graph from Matt Stone and Trey Parker?

  30. kimsama says:

    I second public schools:

    Go State!

    I went to a private school for my grad degree, but only ’cause I got a fellowship. Otherwise it would have been at dear old state, just like the cheap (but good!) undergrad degree. ^_^

  31. no.no.notorious says:

    college is over rated unless you want to be an accountant, a lawyer, or a doctor….or some other super high end job

  32. Anonymous says:

    Private vs. public is a tough question. There are definitely some great public schools out there, but I’ve also heard that it can be difficult to get into the most popular majors right away, which can mean adding on an extra year of school. I graduated from an Ivy League school in 2005 and I don’t think I’d doing as well as I am now if I had gone elsewhere. The career center at my school was superb and helped me get my foot in the door. After 2 years at my company, I’ve landed a well-paying position that normally would require 3-5 years experience.

    However, I was also lucky by having wonderful and supportive parents. They don’t make a lot, but my sister (who also attended an Ivy League school) and I enjoyed a pretty decent middle-class lifestyle growing up. My parents are frugal and don’t spend on things like annual family vacations or high-end electronics. Our family paid for about 1/4 of our education (parents savings and part time jobs), we received about 1/4 in merit scholarships, and the other 1/2 was grants from the schools since we did qualify for financial aid. And now we’re starting our adult lives completely debt-free!

    (Disclaimer: I know it doesn’t work out that nicely for everyone, but I’m just sharing my “success” story.)

  33. stanfrombrooklyn says:

    I teach at NYU. One of my students just graduated with $100,000 in debt with an English degree. He’s now going back to law school and taking on more debt because he thinks becoming a lawyer is the only way he can ever pay off his debts. He wanted to be a filmmaker.

    One of my classes has 55 students that are paying roughly $2000 each in prorated tuition to take the class. So NYU is making $110,000 from this one class. I make pro-rated about $2K for teaching this one class. So NYU is making $108,000 for doing everything else they do such as providing the classroom space (3 hours a week) and handling the registration process etc. etc. The class is 12 weeks.

    One of the major flaws in the student loan business is that the government guarantees a lot of student loans. So a private loan company is not risking its own money by loaning $100,000 at 10% interest to a 19-year old English major. If that student defaults then they will get their money someday from the government.

    The upshot then is that a 19-year old student who could never possibly qualify for a $100,000 loan for a house or to start a business can easily qualify for this type of money to go to college.

    Because students can get this type of money, colleges have no incentive not to continue to raise tuition. They know they will get the money because students will just take out bigger and bigger loans. You almost have to go to college in the U.S. if you want a decent life.

    The big name schools (Dartmouth, Stanford, Harvard, etc.) are worth every penny because you get a life long network that’s unbeatable. Where I think students take the wrong path is when they go to a very expensive private regional school that doesn’t have a lot of name recognition. They graduate with debt up to their eyeballs. In that case, they’d be better off going to an inexpensive state school or university and leave with some money in their pocket.

  34. GinaLouise says:

    I third state colleges! I’ve got a good job and NO debt, thank God. I work with people who went the Ivy League route and are paying off massive loans, though, so I know how much that affects life decisions. I know people who’ve had to delay having kids, etc.

  35. yg17 says:

    @SaveMeJeebus: For me, it was, about 2 grand a year I think, which gave me 15 meals a week in the dorm cafeteria downstairs where I ate something. I don’t know if you can really call it food or not. It was disgusting. And since the college requires all students to live on campus the first 2 years, and requires all students living in a dorm to have a meal plan, I was stuck. My only way out of the dorm and meal plan would be to join a fraternity, and you still have to pay for that and I don’t consider myself a condescending asshole, so the frat wasn’t an option. And the entire time, tuition’s been going up each year without any added benefit to us, the students.

    Politics are alive and well here. I suppose you can’t take the “state” out of “state universities.”

  36. Techguy1138 says:

    @stanfrombrooklyn:

    Your student who graduated with an English degree and 100k in debt has issues.

    Just like people who buy houses that are to expensive he should not have got to your school and shouldn’t have accumulated that much debt for an English degree if he wanted to be a filmmaker.

    Sometimes even good things are too expensive to be worthwhile. College is quite like that. You need to pick a school that you can afford and a field that allows you to make enough money to pay back your debt.

    College is fun and it’s nice to do what you want for a few years but if it costs you freedom and hampers your life dreams do something else.

  37. LiC says:

    Mmm…I have less than $15k in loans. Most of that is from some really stupid borrowing my 1st and 2nd years of uni. I would have avoided most of that if I hadn’t lived in the uni housing; as if I could pay $5.5k upfront AND tuition and books on top of that. The stupid housing payment plans did not encourage students to use installments – only prostitutes can earn $600 a month for housing + $100 for incidentals once school has started.

  38. carblover says:

    @USERMANUAL: I would not have taken the loans out had I known then what I know now about money and debt. I was just doing what got me into and out of college ASAP.

    I’m in the same boat. What did I really know at 18? I’m now 24 with about 100k in loans+interest after going to a fabulous private school. Was it worth being in that much debt? Yes. Will I eventually pay it off? Of course. Would I make that same decision again? No. You can tell an 18 year old what loans mean for the future, but it just doesn’t sink in.

  39. royal72 says:

    unless you’re gonna be a rocket scientist or some specific trade that needs specialized education, why on earth would you spend tens of thousands of dollars, for a basic education?

  40. anatak says:

    “The total federal student loan debt in the US is $492 billion”

    A terrible number and yet still less than the total credit card debt in the US ($700+ billion)

  41. Trai_Dep says:

    The simple fact is that when the precious Boomers went to school, Americans did the right thing and decided that education was an investment, and paid for it. Through (gasp) taxes with (gasp!) no complaint. Then it rolls around to the Boomers’ turn to pay for the next generation and they decide – waaaah! – that taxes for needed social investment is unfair.

    Besides the outliers (Harvard, etc), you look at the rise of tuition and the drop in public funding and they’re roughly assymetrical. The fact is that you NEED a college degree, yet they’re common. So students rationally choose the best school they can get into, cross their fingers and hope they’ll be able to afford to pay for it when they graduate. Also rational.

    Where it broke down is all the whining baby boomers who, once THEIR education was bought by their elders, started sobbing about how unfair it was that local and federal government was “wasting” money on schools, money that the gods CLEARLY meant to go to buying the latest BMW.

    Gawd, I hate the Boomers.

  42. Trai_Dep says:

    …And the people that are blaming students for attending “expensive” schools – check out the school’s site you graduated from for a reality check. Tuition isn’t $40/semester any more. Sheesh!

  43. veronykah says:

    @carblover: I completely agree.
    I went to the top private school in my field. After meeting plenty of people who do what I want to do, it is pretty apparent the money will come. The only problem is, the first 10-15 years out of school when I have to “pay my dues”.
    I graduated with no other debt than student loans, about 70k. I am drowning in debt at this point. Your first few years out of college are difficult for anyone, the problem is when you have massive student loans, those first few years are even harder with $600/month loan payments.
    I find it funny that the government is willing to bail out people who got themselves into loan situations they coudln’t afford uying houses, but completely ignore the fiasco that is student loans.
    Knowing what I know now, I probably would have handled college differently. Definitely would have thought a lot harder about the school I attended. But unfortunately hindsight is 20/20.
    And to all those posting about going into a field where you KNOW you can get a job after college, other than teaching [hmmm pay off your loans on that salary], nursing and other public sector jobs. Where is this that you can GUARANTEE you can get a job out of college?

  44. JiminyChristmas says:

    @SaveMeJeebus: Make sure your degree has good entry-level salaries and is in demand? Easier said than done.

    If you declared a major in computer science in 1999 it would have looked like a sure thing. When you graduated in 2001 you would have been shit outta luck along with all of the other tech bubble casualties.

    Or what if you declared a major in constrution management or engineering in 2005? You would have graduated just in time for the housing bubble to explode.

    See? Predicting the future is hard.

  45. Trai_Dep says:

    Also, there’s a LOT of good that’s done – that’s direly necessary, in fact – in all the jobs that don’t pull down Gordon Gekko type wages. Our society will be poorer (and the average American’s life much worse) without these types of degrees and vocations. An education is – must be – about more than a paycheck at the end of four years. Again, it’s a social investment.

  46. Trai_Dep says:

    Oh, just curious… Of the people saying it’s foolish to go to a prestigous school when a community college is just fine. Did any of you get INTO a prestigous school and decline the offer? Let us know in the comments.

    Potential for sour grapes here, obviously.

  47. veronykah says:

    @trai_dep: Thank you! When you get an accpetance letter from a prestigous school, really would you turn it down?
    I GOT one of those letters and there is NO WAY I was turning that offer down to go to U of Whatever. Yes, my decision put me deeply in debt. However, like was said earlier, education is an investment. My issue is, being 1 year out of college I have yet to see the investment pay off. Hopefully my perspective will be different in the future.

  48. stinerman says:

    @pinkbunnyslippers:

    Yeah, being in the donut hole does suck pretty bad.

    The thing most people don’t get is that even if you’re dirt poor, you still don’t get everything paid for. I had an EFC of 0 the last two years I was in school. I still had a really hard time making ends meet. This is probably more the fault of the state of Ohio for not funding their public universities enough which drove tuition through the roof (OSU raised tuition by 35% in one year, IIRC) than the feds for not having updated grant/loan limits.

  49. Anitra says:

    @veronykah: Personally, I applied to five good schools (two Ivy League & one equivalent, the other two one tier down)… One of the Ivies accepted me, but I decided to go to one of the two second-tier schools. Why? Because the Ivy was somewhat more expensive, with a lot less financial aid, much bigger classes, and no guarantee that my classes would be taught by professors instead of TAs.

    That said, I still went to an expensive private school. I didn’t even LOOK at state schools. I graduated with about $20k in debt. I don’t regret it, but I wouldn’t necessarily recommend it.

  50. Onouris says:

    Ouch. Sounds bad. I’m just thankful that my University fees were about 1000 pounds a year (no freaking pound sign on this American keyboard!!!) and I owe about 10k. 40k would suck, and suck hard.

  51. Woofer00 says:

    Attended Ivy Undergrad, graduated with a BS, went into a private law school w/GPA and LSAT lower than my peers who attended private undergrad but not-Ivy, public undergrad, and who gained a similar or comparable degree. I’m fairly certain that the name helped. I also know peers who have similar stories in other fields who have similar stories. Will the big name get you more $? hell no. Will it get you into/past the first round of criterion for a job/grad school? not quite hell yes, but certainly affords a nice jump in the market. Don’t forget that the extra 70-100k spent in the school in the short run can reap much greater benefits in the future, both in connections and recognition. 70-100k over 30+ working years only needs $2-3k to equalize. For higher education or competitive urban jobs (like NYC, DC, Boston, SF, LA, Chicago, etc), the lifelong connection and networking opportunity is worthwhile.

  52. Squot says:

    I am personally almost 90k in debt already, and I have two and a half years left. This is due to both money-jockeying on my part (using much lower rate student loans to pay off my almost 30% credit card, etc.) as well as having declared as a tech major before the bubble burst and completely changing my major.

    However, I’m currently working two jobs and have a savings plan in place to start paying off my loans while I’m in school. My general outlook is this: 1000$ in checking, 3000$ in high-yield saving account for emergencies, empty CC for emergencies, empty overdraft line for emergencies. Anything over 3k in the savings account gets chucked headfirst at the loans, private first. I am also planning in maxing out the amount of borrow-able income from the government, because of the lower interest rate on federal loans.

    While I do realise that this is not the best plan in the universe, it’s the one I have that works – I unfortunately was not fortunate enough to have any sort of help from anyone for school (and I’m currently working for the Studio Scholarship, and am working for others.)

    If it helps, I have no other bills whatsoever, and after this year I’m moving out of student housing? =/

  53. Bunnymuffin says:

    @crnk: Umm, my community college had an articulation agreement with my current school and ALL of my credits transfered. Once everything was calculated, I have enough credits that I could possibly finish a year early if the scheduling permits.

  54. Her Grace says:

    I went to a small, private undergrad, and have no debt from it. Have I mentioned I love my parents? Hi, crazy mom. I love you.

    I’m finishing up my MA in Australia, now, and will come out with something like $28,000 debt for it. Overall, I’m happy–a postgrad degree is required for a lot of the jobs I’m interested in, and gives me a higher pay for those that don’t require it (mostly governmental work, civil and foreign service). I could have done the same degree in the US for about the same price overall, but I’ve had the opportunity to live in another country for over a year now and experience a totally different life. I’m actually hoping that having had a different life experience than the norm will help me in interviews. I can bullshit something about being a global and American citizen or something.

    I would really like to do a second masters, possibly a PhD, in linguistics, but I’m also exhausted from school and want to pay off my current loans. My goal is to be able to pay for my kids’ undergrad as well, when I have kids, so saving up for that and paying off my own loan are the two big things coming up. Hopefully, in the 20-25 years before I have college-aged kids, there will be a reform and the prices will stop rising astronomically.

  55. disavow says:

    Everyone wants a name-brand education so they can land a good first job. But does it really matter after a handful of years in the job market? From what I’ve seen it’s basically, “Oh, you went to Stanford? That’s nice. Do you know anything we can actually use?”

    With regards to transferring from junior colleges to universities, articulation agreements aren’t necessarily a given. Especially when one’s transfer options are limited by obligations to work, family, etc. In my area, only a couple of universities offer full night programs, and each has terribly haphazard transfer policies.

    Students have a responsibility to balance the costs and benefits of their education. And society as a whole has a responsibility to keep those costs affordable, or else everyone suffers in the long run.

  56. vdragonmpc says:

    Please… College for many is a waste of resources. I went to a state school (VCU) that basically taught me NOTHING I needed in my career. I was an IT major. I already had the basic skills from a 2 year community college and hands on knowledge. Here is where the area goes grey: 4 year degree, nice but not as powerful in an interview as MS certification which of course the college classes did not prepare you for.

    I have a 4 year degree to hang on my wall and it lets me check a box on a job application that I attended college BUT it does not fill in the ‘what I can do’ blanks. I needed certs and experience to land a job not to mention contacts that the school seems to not have at all.

    Now add in loans from Sallie Mae that they hound you over and the threat to your security clearance by being defaulted and life gets interesting.

    Did I mention my coworker makes the EXACT same salary as me and has no degree just an MCSE? He studied and took a few tests and his cert trumps the college! nice.

    V

  57. Trai_Dep says:

    Well, you need to balance which school is important for what major. A tech degree from MIT carries more heft than a tech Ivy, than a state school than a two-year than DeVry.

    But I think that tech degrees are more applied than liberal arts degrees. I feel the latter trains you how to think, versus how to do something. And for many companies, who after all train you what to do, getting someone that has a fluid, inquisitive mind is important.

    And to a certain extent, a name school is applying a well-known brand to your brain. Not a bad thing.

  58. IC18 says:

    2 year CC + 3 Year State University = No Dept.

    I was glad I am $0 in dept from school loans, it will help a lot when working towards that MBA degree, which I estimate will be around $20K.