Penn State stu­dent debt high­est in Big Ten schools, av­er­ag­ing $36K

The Morning Call - - LOCAL/STATE NEWS - By Sarah Paez

Stu­dent debt is a $1.5 tril­lion is­sue in the United States, and Penn State stu­dents bear the high­est debt load in the Big Ten.

In a pre­sen­ta­tion to the Penn State Board of Trustees on Fri­day, Pres­i­dent Eric Bar­ron talked about who is most af­fected by debt at Penn State, and what pro­grams and ini­tia­tives the univer­sity has im­ple­mented over the years to mit­i­gate prob­lems.

From 2017-2018, the av­er­age loan debt at grad­u­a­tion for an in-state Penn State stu­dent was $36,044. For out-of-state stu­dents, the av­er­age loan debt was $40,770, ac­cord­ing to the 20172018 An­nual Re­port. Fifty per­cent of Penn State stu­dents have loans and 68% have some sort of fi­nan­cial aid, the re­port said.

A third of stu­dent debt is from top earn­ers, which Bar­ron said is “sur­pris­ing,” but means that high-in­come fam­i­lies have de­ter­mined “it is cheaper to get the loan and pay it back over time” rather than use eq­uity or in­vest­ments to fi­nance higher ed­u­ca­tion.

Penn State ranks high­est in the Big Ten in me­dian fed­eral debt for un­der­grad­u­ate bor­row­ers, at $26,120 upon grad­u­a­tion, ac­cord­ing to U.S. Depart­ment of Ed­u­ca­tion data. The univer­sity also has the high­est av­er­age an­nual cost of at­ten­dance in the Big Ten, at $30,373, com­pared to Pur­due with the low­est at $13,746.

Bar­ron said freez­ing tu­ition had a min­i­mal im­pact on many stu­dents, sav­ing each $175 over the year.

“It is un­likely that that $175 changed grad­u­a­tion rates or changed stu­dent debt,” he said last week.

Bar­ron said, based on the data, higher grad­u­a­tion rates and shorter grad­u­a­tion times are key in keep­ing down stu­dent debt. Penn State’s six-year grad­u­a­tion rate is 85%, which is the fifth-high­est in the Big Ten.

“Get­ting to your de­gree has got to hap­pen, or you have the worst pos­si­ble out­come,” he told the board.

A study of a 2010 fresh­man co­hort of Penn State grad­u­ates found that the longer it took to grad­u­ate, the more debt one ac­crued. Those who grad­u­ated in over six years had, on av­er­age $47,376 in debt, and those who grad­u­ated in four years had $35,575 in av­er­age debt.

Penn State has de­vel­oped sev­eral Open Doors pro­grams to help stu­dents both fi­nan­cially and aca­dem­i­cally so that they grad­u­ate on time and with less debt, Bar­ron said.

“We should pro­tect the vul­ner­a­ble bor­row­ers” rather than fo­cus­ing on stu­dents whose fam­i­lies make more than $75,000 per year, he said. “It could be life-chang­ing for them.”

He pointed out RaiseMe schol­ar­ships, which awarded 390 stu­dents from spe­cific low­in­come-area Penn­syl­va­nia high schools $145-$4,000 per year in 2019.

Path­ways to Suc­cess: Sum­mer Start, Smart Track, Stu­dent Tran­si­tional Ex­pe­ri­ence Pro­gram and Com­plete Penn State all of­fer schol­ar­ships com­bined with credit, men­tor­ing and other sup­port for low-in­come or at-risk stu­dents, Bar­ron said. Al­to­gether, these pro­grams have as­sisted 1,253 stu­dents over the last year. Provost awards, rang­ing from $5,000-$7,000 per stu­dent per year, have been awarded to 13,000 stu­dents since the pro­gram’s in­cep­tion in 2013.

Penn State se­nior Tay­lor Machuga, a first-gen­er­a­tion col­lege stu­dent from a small town in north­ern New Jer­sey, talked about her pos­i­tive ex­pe­ri­ence with Com­plete Penn State at the board meet­ing. Al­most forced to drop out be­cause of an un­ex­pected fam­ily med­i­cal ex­pense, Machuga re­ceived fi­nan­cial and aca­demic sup­port from the univer­sity so she could fin­ish her course­work. She plans to work in sports mar­ket­ing af­ter grad­u­at­ing this win­ter.

Penn State also of­fers fi­nan­cial ad­vis­ing to stu­dents through the en­dowed Sokolov-Miller Fi­nan­cial and Life Skills Cen­ter. Over­all, its classes and men­tor­ing reached more than 5,000 stu­dents last year. Starfish, an ad­vis­ing tool to help stu­dents stay on track to grad­u­ate, reached more than 50,000 stu­dents last year.

Alumni-elected trus­tee Bar­bara Do­ran asked Bar­ron how much need at Penn State is still un­met, de­spite the ex­is­tence of these pro­grams.

“You could ab­so­lutely dou­ble ev­ery sin­gle one of these pro­grams and we would not meet the need,” he said. Then, he added, “I think we’re unique be­cause we’re hit­ting this at ev­ery sin­gle fail point for stu­dents.”

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