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