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Many students are leaving college with huge student loan debt. After years of rising college costs and shrinking financial aid, it's come to this: Some graduates are now leaving college with student-loan debt in the six figures. Graduates with more than $100,000 in debt still account for a small subset of borrowers. But their numbers are rising. And the proportion who are leaving college with some level of unmanageable debt — debt they can't repay without significant hardship — is swelling. In 2004, nearly 8% of graduating seniors carried student loans of $40,000 or more, according to the Project on Student Debt, a non-profit advocacy group. In 1993, even adjusted for inflation, only 1.3% of college seniors had debt that large, says Robert Shireman, director of the project. |
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| About 40 percent of students now graduate with what lenders consider "unmanageable" debt loads, meaning their payments eat up more of their salaries than is considered financially sound. "One of the most provocative things we found was the share of student costs covered by loans has fallen even as the amount of loans has increased," said Heather Boushey, an economist for the research center. "To put this in perspective, back in 1981, a student could work full time all summer at a minimum wage job and earn about two-thirds of their annual college costs," she wrote in a recent report. "Today, however, a student earning the minimum wage would have to work full time, (for a) full year to afford one year of education at a four-year public college or university." |  |
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| The money borrowed for a college degree may mean higher earning potential -- by some estimates a college education can add $1 million to a graduate's lifetime earnings -- but it has unexpected costs as well. Student loan burdens affect people's choices: what kind of job they take, where they live, whether they buy a home or start a family, said Swarthout. "It has serious consequences." There's a social cost as well if graduates start to veer away from lower-paying but socially critical jobs, such as teaching, social work, legal aid or non-profit work. http://seattlepi.nwsource.com/local/257094_studentloandebt26.html |
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