Debt, Deterring Public Service

Student loan repayment may preclude large numbers of graduates from teaching and social work jobs, study suggests.
April 6, 2006

As college tuitions rise -- and levels of student debt, not coincidentally, mount along with them -- one of the ill effects public policy experts fear is that graduates will avoid low-paying public service jobs because they fear being unable to pay off their loans.

A report released Wednesday by the State PIRG's Higher Education Project concludes that student debt could make it impossible for a large number of college graduates to afford to take jobs in two high demand public service fields: teaching and social work. The report, "Paying Back, Not Giving Back: Student Debt's Negative Impact on Public Service Career Opportunities," compares the average starting salaries for teachers and social workers (and the corresponding amount of debt they can manageably carry, using a formula crafted by two leading higher education economists) with the average debt burden of private and public college graduates in 2003-4.

The study found that 23.2 percent of graduates of four-year public colleges and 38.1 percent of four-year private college graduates had more than $18,370 in debt, which, under the formula for defining "manageable" debt developed last year by Sandy Baum and Saul Schwartz, would mean that they could not afford to repay their loans on the average new teacher's $31,704 starting salary.

Even higher proportions of 2003-4 graduates -- 37.3 percent at four-year publics and 54.8 percent at four-year privates -- would have debt burdens too great to afford to pay off their loans on the average social worker's starting salary of $27,163, the PIRG study found.

The report offers state by state numbers, as well, showing New Hampshire, Wisconsin and North Dakota to have the greatest proportions of graduating students who would be deterred from those public service careers by student loan debt.

The report calls for increasing need-based grant aid, expanding repayment options, improving protections for borrowers, and encouraging colleges to control tuition to avoid limiting the number of students flowing into these high-need fields.

"Having such a high percentage of students facing burdensome debt has consequences both for
specific professions of high social value and the entire economy," the report concludes. "As loans continue to play a major role in the way that most students pay for college, more graduates will have to factor loan repayment into their post-collegiate plans -- and more may shy away from public service careers with lower starting salaries."


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