Jeff Newbold, a Utah State Masters in Accounting student, is completing his second semester of the program and has taken out almost $ 10,000 in federal loans.
Newbold said he received scholarship money but small costs along the way have added up. This fall, Newbold and thousands of other Utah graduates will enter the job world with thousands of dollars in debt and little or no job security.
“I have been told my whole life that if I go to school and work hard, I will have a job ready for me. After looking at internships and different possibilities, I worry it could be years and years before I pay off my debts. I guess I have to find a job first,” said Newbold.
National reports recently revealed our country’s student debt has surpassed U.S. consumer debt. Many speculate that student debt could be the cause of our next housing market crisis due to college graduates being strapped down with debt.
But Utah students acquire the least of amount of debt compared to students in the rest of the country. Utah ranks 50th in the nation for average student debt and total college debt, according to the Project on Student Debt, an initiative of the nonprofit Institute for College and Success.
Nationally, 66 percent of students who graduated with a bachelor’s degree in 2010 had accrued student loan debt, data show. The average debt amassed per student is $25,000, a 5 percent increase over the year before. In total, the amount of student borrowing surpassed $100 billion for the first time in 2010, according to the National Association of Consumer Bankruptcy Attorneys.
Only 44 percent of Utah students had loan debt upon graduation in 2010, and the average amount per student was $15,509.
The cost of attendance at Universities this year averaged out to be between $14,000 and $15,000.
At Utah State University, administrators have noticed a spike in the amount of money students borrow for school. Income accounting at the University of Utah reports that the percent of students taking out loans has only slightly increased, while the total amount of loans has increased more significantly.
One factor in the increase is the federal government’s increased lending limits over the past few years, he said. For example, limits for federal loans have more than doubled in the past five years. The recession has also forced students into taking out larger loans.
Kristen Johnson, who works in incoming of accounting at Utah Valley University, explained that many students are drastically increasing the amount of their loans due to the poor economy.
“Students build debt with the hope of job options after finishing their bachelor degree. When there is no job, they work towards masters degrees that require even more debt,” said Johnson.
Jeff Varner, director of income accounting at Brigham Young University, pointed out that state of Utah still has room to improve in reducing student debt.
“Utah has low student debt due to a number of reasons. We have some of the more affordable college educations but also have successful programs that allow kids to work while studying. The combination of better career planning combined with work options can continue to reduce the amount of student debt,” said Varner.