More from The Chronicle

The Chronicle of Higher Education starts a new series today, “Sticker Shock”, focused on the rising cost of higher education—it’s not a new topic, but as the author, Goldie Blumenstyk, says, it’s “damnably complex,” and there are no clear solutions. With The Chronicle’s deep knowledge of higher education issues, this should be an enlightening series.

In the first installment, Blumenstyk presents an overview of the rising cost of higher education - the growing burden tuition places on family incomes and the increasing debt loads of college graduates. While discussions of college costs often focus on tuition in terms of family income or total student loan debt, they often don’t consider how salaries for college graduates figure into the cost equation.

In 2005, NCES took a look at the debt burden—the percent of monthly income dedicated to loan payments—for students who graduated college in 1993 and 2000. Debt burden is a useful measure because it takes into account total debt levels, terms of repayment (e.g., interest rates, flexible repayment plans), and graduates’ salaries. Based on the NCES report, the debt burden for graduating students didn’t actually increase much, despite a jump in the average total debt at graduation.

From 1993 to 2000, the average amount borrowed among graduating students who took out loans rose from $12,100 to $19,400, but the debt burden only rose from 6.7% to 6.9%. This is partly due to more favorable interest rates for the later cohort, but also because salaries one-year after graduation rose from $28,300 to $34,100.*

Unfortunately, these numbers are old and we don’t know if salaries are continuing to keep up with the rising debt loads of students—recent media accounts would suggest they aren’t. As we face an uncertain economic future in which salaries for recent college grads might not rise as quickly as their loan debt, debt burden should be another regularly cited indicator of the impact on students of rising college costs.


*Loan amounts are in 1999 constant dollars and salaries are in 2001 constant dollars.