Grads’ debt below national averages
Laura McCrystal | Tuesday, November 2, 2010
Notre Dame graduates’ student debt is comparable to or less than national averages released in recent reports, according to Joseph Russo, director of Student Financial Strategies.
Comparing Notre Dame’s student debt to averages in national reports is difficult, but valuable, Russo said.
“We always benchmark,” he said. “It’s good to compare.”
The Project on Student Debt, a national organization, released a report about student debt on Oct. 21. The report, titled “Student Debt and the Class of 2009,” stated that 2009 college graduates had an average debt of $24,000.
Russo said the median student debt for 2009 Notre Dame graduates who borrowed money for their education is $23,588. This number includes government and private loans.
According to The College Board’s “Trends in Student Aid 2010” report released last week, the average student debt for 2009 graduates of four-year, private colleges was $26,100. Russo said this number is a more accurate comparison for Notre Dame because it compares the University to its peers.
“We compare pretty favorably on that one,” Russo said.
Russo said Notre Dame graduates’ default rate for student loans is well below the national average. According to The College Board, seven percent of college graduates default, or fail to pay, their student loans. For Notre Dame graduates, however, Russo said the default rate is less than one percent.
“So yes, $23,588 is a lot of money, but even in tough times our default rate seems to be decent and students appear to be managing their monthly payments.”
While national reports such as The Project on Student Debt use both government and private loans to determine total debt numbers, Russo said he prefers to exclude private loans when analyzing Notre Dame’s averages. Private loans are discretionary for each student or family, he said. The University only presents government loans, which include both Perkins and Stafford loans, as part of its student financial aid packages.
“A University policy in awarding student aid in general to try as best we can meet the full financial need of students, and we do that often by incorporating underlying government student loans … not private,” Russo said.
The median student debt for Notre Dame’s 2009 graduating class, excluding private loans, was $19,225, Russo said. That number rose to $20,625 for the class of 2010.
While Russo said national reports can be valuable, he also said public and media attention tend to focus on extreme or individual cases of high debt.
“Those are not representative,” he said. “Look at [Notre Dame’s] statistics. People who start here actually finish on time … and they’ve had a good experience and they pay their loans off.”
Summarizing student debt through averages is also a challenge, Russo said, because each student’s financial situation is different. He said Notre Dame uses the median numbers when analyzing financial aid because it removes the “outliers.”
“It’s always dangerous to quote statistics,” he said. “The biggest single challenge I’ve had in 46 years has been the need to provide good, simple, accurate … information.”
However, Russo said he is confident when speaking about Notre Dame graduates’ ability able to handle college debt because a good education is an investment.
“More and more, when we talk about affording education, we talk about seeing it as an investment,” Russo said. “Which, if you’re a typical Notre Dame grad, the return on your investment will be your lifetime and how you do, not just income-wise … but also your health, your longevity … your civic involvement. So many good things happen if you’re a Notre Dame graduate.”