Newsweek reports that “undergraduate borrowing trends were worrisome. An analysis by TICAS’s Project on Student Debt found that 10 percent of college graduates in 2008 owed at least $40,000 in loans”. An undergraduate who leaves college with this much debt will not be able enjoy the financial rewards of his education, and in fact, would have been better off (financially at least) by skipping college altogether. While some debt may be warranted and supportable, for most students it must be a total of less than $5000 per year over a 4 year program. Repayment should begin ASAP and be finished before a graduate contemplates buying a home.
I fell into this group with too much college debt and will pay for it with 25% of my income for the rest of my working career (17 more years). My two oldest step-children also fell into this trap and I suspect will not be able to sustain their loan payments after graduation without feeling long term financial stress.
The good news here, it appears, is that 90% of college graduates were able to find a way to pay for college without taking on excessive debt. I am committed to making sure that my children are among this group.