While the state is often praised for its commitment to higher education, a new study reveals that state residents now carry the highest student loan debt in the nation.
The state tops the list of student loan debt at an average of $33,563 per student, according to a study by CreditKarma, a San Francisco-based credit company. But students who take out loans at this university are incurring $19,000 in debt on average, which Director of Financial Aid Sarah Bauder said was a modest figure.
“I think it’s manageable, especially when you look at a college degree as a purchased item,” she said.
A degree, Bauder said, is a student’s investment in his or her future that appreciates in value over time, as opposed to other large purchases.
“If someone’s going to buy a car for $32,000, it’s going to depreciate when you get off the lot,” she added.
Because the state is one of the most affluent in the nation, many students are more apt to apply to private institutions that cost upwards of $40,000 per year, said business school professor Ethan Cohen-Cole, which is largely to blame for higher student debt.
“In Maryland, there are disproportionate amounts of private school students versus other states,” Cohen-Cole said. “You can imagine that a student from Bethesda that goes to a private college will take on more debt than a student from a poor community that goes to state college.”
However, junior communication major Sydney Airey, a state resident, said she’s looking at nearly $40,000 in debt when she graduates, which is already a source of stress for her.
“It’s pretty serious because I’m going to have to pay all this back,” she said. “Even if it isn’t manageable I’m going to have to do it anyway.”
Cohen-Cole added college costs are growing at a faster rate than income, making student loan debt a heavier burden for students and parents.
“Parents are paying more and the students are paying disproportionately more,” he said.
The state is also home to many more graduate school students relative to other states, said Joseph Vivona, University System of Maryland vice chancellor for administration and finance. Vivona added the debt levels may suggest students are incurring more debt, but noted graduate students typically have higher incomes when they graduate from college because of their extended studies.
“Where there are many more graduate students and professional students and a fair share of non-resident students you may tend to get higher debt level,” he said. “This is not a low salary state. That’s not to diminish the hardship that graduate students or undergraduate students face, but there is an investment and reward component to this.”
But some experts, such as student loan expert Heather Jarvis – who also founded AskHeatherJarvis.com, an information resource for borrowers and their families – said the data does not accurately reflect college affordability in the state. Instead, Jarvis said, it reflects a measure of state residents’ education, who often seek more expensive schooling and “higher quality” education.
“I think that it can be related to factors such as the amount of education people living in the state tend to have,” she said. “It can mean that they attended more expensive schools that are not necessarily in Maryland.”
She added this university and other schools in the area are more affordable than in several other states.
“Education is more affordable in Maryland than it is in many places,” she said. “The University of Maryland is a smart choice as far as a good value education that’s going to give you less student debt than many peer institutions.”
Junior Omid Gharavi, however, said he has already taken out $7,000 in student loans, which his job can’t cover.
“I work for $9 an hour, and every semester it costs $8,000 for me ,” he said. “I’m already worried about paying off after graduation.”
bach@umdbk.com