Study: Average debt increases for seniors

Average debt for graduating seniors continues to rise even as it is getting more difficult for recent college graduates to find jobs, according to a new study conducted by the Project on Student Debt.

The study found that between 2004 and 2008, average debt for graduating seniors with loans increased from $18,650 to $23,200.

But while student debt may be increasing rapidly at universities across the country, Career Services Director Patricia Rose said this is not the trend at Penn.

Starting this past fall, all undergraduates eligible for financial aid began receiving loan-free packages regardless of their family income.

“I think it’s wonderful that Penn has moved to loan-free packages,” Rose said. “I think this will free up students to consider a broader range of careers.”

Rose said students who have to pay off loans after graduation are often more limited in their career choices than students who graduate debt-free.

“If you have debt, you’re less likely to consider a low paying job … and you’re less likely to take a job that requires you in some way to function as an unpaid intern before you get any compensation,” she said.

Rose added that students who graduate with a lot of debt are also more likely to take lucrative corporate jobs than jobs in nonprofit, social service and cultural organizations.

In addition to struggling to pay off loans, students’ prospects of landing a job haven’t improved.

The study also found that the unemployment rate for college graduates between the ages of 20 and 24 has increased from 7.6 percent to 10.6 percent over the past year.

According to the study, an initiative of the Institute for College Access and Success, this unemployment rate is the highest it has ever been on record.

The number of recent Penn graduates that are struggling to find employment has also increased slightly over the past year.

While nine percent of the Class of 2008 reported they were still looking for employment six months after graduation, 11 percent of the Class of 2009 said they were still seeking employment six months after graduation.

Although the numbers at Penn are higher than the national averages found in the Project on Student Debt survey, Rose said these unemployment rates can’t be compared because Penn only surveys students within six months of graduating.

“Most of the college graduates from Penn are employed at the age of 23 and 24,” she said. “I have no way of knowing what that number would be for Penn.”

Rose added that the number of recent Penn graduates that find employment is actually remarkable considering the high national unemployment rates.

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