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Mounting Debt and Lower Salaries – A Persisting Trend for Grads

College education is costly and a majority of students have had to compromise on the college they choose to attend simply because they can’t afford the fees. Even at less expensive colleges, most students finish college with massive amounts of education debt. Often these debts need to be paid off just months after leaving college. This overhanging debt can have a negative effect on many areas of life, from your credit ratings to where you live after college.

Although the official economic depression is now history, extending from December 2007 to June 2009, the economy is only recovering gradually and the impact of the great recession can still be felt in America and around the globe. The country has not yet recuperated fully from the economic depression. Due to the recession, millions of people went jobless. Despite the slight economic revival, the job market is still pathetic. Plus… the cost of education and the cost of living are on the rise. Thus, making student loan payments is turning out to be one of the chief problem areas. And, it’s taking a toll on the fresh grads in light of the small number of jobs available to them.

According to the 2011 AVMA yearly survey of graduating veterinary students, fewer graduating students got job offers in 2010 than in 2009 and even fewer got got job offers in 2011.  In 2010, 78.9 percent of them received job offers, down from 79.5 percent in the year 2009. But only 74.3 percent of grads got a single job offer in the year 2011. And the fraction of students who entertained four or more job offers, has declined radically in the last decade, from 23.5 percent (2001) to 4.8 percent (2011).

In addition, those who did get offers were paid less. Full-time entry-level salaries for 2011 graduates was $66,469, or 1.3 percent less than that of the 2010 graduates ($67,359). The study also revealed that for nearly 90 percent of veterinary college grads with debt, average student debt grew from 2010 to 2011. Average student debt for 2011 grads was $142,613, nearly 6.5 percent more than that for 2010 grads. While the average debt for 2009 grads was $129,216.

So graduate debt is increasing while salaries are decreasing (if they can find a job at all). If this trend continues, the likely outcomes for fresh graduates are upsetting. The unstable fiscal situation will greatly affect the decisions they will have to make.

Rise in the tuition charges

According to the U.S. Department of Education, the debt condition in regards to graduates seems pretty depressing. In addition to lower salaries and poor job prospects, the expense of schooling itself and the use of student loans has increased in the previous two years. Reports suggest that the net amount of student loans acquired in 2010 alone exceeded $100 billion. And in 2011, the total amount of outstanding student loans surpassed $1 trillion.

Michigan State University holds the second highest position in view of high tuition fees. In the case of the out-of-state pupils, the tuition increased from $47,838 to $51,184 (7.0 % rise). For in-state pupils, it went from $23,160 up to $24,778. Online programs are holding steady at around the same tuition prices. The University of Minnesota and the University of Pennsylvania too have followed the trend. The University of Wisconsin witnessed a 20% hike in tuition charges. In the year 2011, the Chancellor of University of Wisconsin-Madison stated that UW-Madison shall be compelled to raise tuition charges by nearly 20 percent in the subsequent two years if the state cuts back nearly $50 million from the financial statement. This growth in tuition charges is going to further increase the borrowing needs of the students.

 

See: Using a Student Loan Calculator

You might also be interested in the effects of inflation on your income and expenses: Inflation Calculator

See Also:

Tax Deductions for New Parents

Online Degree More Affordable Than on Campus

10 Ways to Save Money on Your Next Family Vacation

10 Money Management Tips for Kids

Teaching Children How to Save Money – But Also How To Spend And To Give

How Expensive It Is To Bring Up A Child In The US?

Money-Saving Ideas for Frugal Moms and Dads

20 Tips for Saving Money When Raising Kids

How Have Online Colleges Affected Tuition Costs for Traditional Schools?

Jobs Crisis Among Recent College Graduates

 

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