Penn State students have, on average, a higher level of debt when they graduate than most students in the country, according to the U.S. Department of Education. But they are not alone. Pennsylvania overall ranks among the top 10 states (including the District of Columbia) for student debt load. Source: “Student Debt and the Class of 2008” report by the Project on Student Debt.

by Dave DeIuliis

Although Penn State students will be an average of $29,000 in debt when they graduate—well above the national average of $20,200 for the same cohort—many see their degrees as well worth a veritable mountain of debt.

Alyssa Fettinger, a graduating senior studying health policy and administration, estimates that upon graduation, she will have to repay more than $25,000 in student loans. She is also aware that 71 percent of Penn State graduates are in the same position, but despite the state of the economy and an entry-level starting salary, she would be willing to take on up to $10,000 more just to attend Penn State.

This willingness to take on more and more debt, as well as institutional tuition increases, are two reasons cited by the National Postsecondary Student Aid Study to explain why the amount of money students borrow has long been growing.

According to the U.S. Department of Education, two out of every three students borrowed a total of $75.1 billion in 2008-2009, a 25 percent increase from the previous year. Although the amount borrowed has been consistently growing for years, a 25 percent surge is the largest recorded. These numbers highlight how taking on debt has become a prerequisite for many families in paying for higher education, and can force recent graduates to postpone further schooling and delay milestones such as buying a home, getting married and having children.

Anna Bernat, a junior who will have an estimated $40,000 worth of debt by the time she graduates, said that although the thought of paying back her loans is overwhelming and she will probably have to put off law school for a “few years,” she looks at her debt load as an investment that will eventually pay off.

“For the most part, my tuition is covered through grants and scholarships. I do, however, have loans to cover my apartment, food and incidentals,” she said. “Someday, all of this school and incurred debt will be worth it. I know that a degree from Penn State is influentia—especially when dealing with alumni. It could very well be the key to my success in life.”

According to a report released in December 2009 by the Project on Student Debt, the average student loan debt levels for graduating seniors have risen 24 percent from $18,650 in 2004 to $23,200 in 2008. Also in 2008, 1.4 million students, or over 67 percent, graduated from four-year colleges and universities with student loans to repay, up 27 percent from 1.1 million students in 2004. Similarly, the average student debt load of $20,200 in 2009 is 20 percent higher than the $16,850 average in 2004.

According to the same report, Pennsylvania was ranked seventh in average student debt load for the class of 2008, and the Penn State University system was joined by West Chester University, Temple University, University of Pittsburgh-Bradford and Lincoln University on a list of “high debt” public college and universities. Bryn Athyn College of the New Church was the lone Pennsylvania school to appear on the list of public and private “low debt” colleges and universities.

Lisa Powers, the director of Penn State’s Department of Public Information, explained Bernat’s attitude by citing research that suggests more highly educated individuals are happier, healthier, make better financial decisions, have much less unemployment and contribute more to society, as well as studies showing evidence of a very high return on higher education and its accompanying debts.

“Penn State graduates are willing to take on this cost because they see it as an investment in their future. Surveys have shown that students see higher education as a key to success in life, and indeed we do produce successful graduates,” she said.

“Penn State’s outstanding international reputation has value, and the quality of a Penn State education is well-known and well-respected. As a world-class research university, Penn State offers a wide range of opportunities and provides students with lifelong skills that can help them get ahead.”

Nevertheless, the decreasing affordability of a Penn State education has not gone unnoticed. A student aid reform package signed into law in March and hailed by President Barack Obama as “one of the most significant investments in higher education since the G.I. Bill,” will save the government nearly $61 billion over the next decade by eliminating fees to private banks that act as intermediaries in providing student loans. The savings will allow for 820,000 more Pell Grants by 2020 and an increase in the maximum grant from $5,550 to $5,975.

Bernat, however, is not convinced that it will be noticeably cheaper to attend Penn State anytime soon.

“People will always want to come to Penn State regardless of how much it costs,” she said. “I don’t like giving the government more control over student loans, but the system wasn’t working well the way it was. Something needs to change.”