Society relies on our colleges to solve our social problems, graduating skilled people to become teachers, social workers, doctors, entrepreneurs and innovators who can improve our collective quality of life.  We also rely on college to offer opportunities to students from all socioeconomic backgrounds, acting as a force of fairness and equality.

To maintain these opportunities, our Higher Education Project seeks to make the student loan programs more affordable and efficient.

These days, college is practically a necessity.  But as states cut budgets, and grant aid has diminished, students are relying on loans to pay for college.  In the early nineties, less than one third of college graduates had loan debt.  Now, over two thirds graduate with debt! Today, the average student borrows almost $20,000 in student loans to pay for college. 

Student loan debt has negative consequences for graduates.  Student debt squeezes young adults out of lower paying but socially valuable careers like teaching and social work.  A Student PIRG report in 2006  found that 23% of public four-year college students graduate with too much debt to manageably repay their loans as a starting teacher. Thirty-seven percent (37%) of public four-year college graduates have too much debt to manage as a starting social worker. Graduates of private four-year colleges face even more significant debt burdens. Thirty-eight percent (38%) of private four year college students would face an unmanageable debt burden as a starting teacher.  Fifty-five percent (55%) of private college graduates would face serious repayment challenges as a starting social worker.

In addition, student loan debt causes graduates to delay marriage, home purchase, and having children.  Borrowers who get ill or injured can suffer credit problems and wage garnishment, even social security garnishment, if they can’t repay. 

The Student PIRGs worked hard over the past several years to convince Congress to lower student debt.  Students across the country fought hard to fill the
halls of Congress and spread the word on campus.   Congress passed a landmark piece of legislation in October 2007 that decreases student loan interest rates and creates new loan repayment programs designed to ease the repayment burden after graduation.

But more and more students are moving beyond financial aid to finance their degrees with private student loans.  Private loans are much riskier, bringing applicants in with low advertised interest rates but spitting them out with higher interest rates and record debt levels. Worse, loan pricing targets lower income students with higher interest rates and penalty fees.  As a result, students with the most need are graduating with the most debt, and debt with higher interest.  

Our project is working to protect students as consumers against the banks, make federal loans for parents more competitive against private student loans, and give students more flexibility within the federal loan programs when their circumstances change, so they don’t need to turn to banks for college financing.

Facing huge loan repayments after graduation has detrimental consequences on students while they are still in college.  Studies show that up to 15 hours of work while also taking classes can help a student focus, but more work than that can hinder their ability to make academic progress.  Our research shows that nearly one-third of all students work more than 35 hours a week to pay for college.  As a result, they miss out on advisor meetings, study groups, quiet time at the library, and extracurricular leadership opportunities. Nearly half of all full-time working students are working enough hours to hurt their academic achievement and the overall quality of their education. At the same time the majority of these students (63%) reported that they would not be able to attend college if they did not work.

Grant aid has helped many students to minimize the negative impact of working and borrowing, but still lags behind what is necessary to provide equal access to a quality education. The students who are most likely to suffer the effects of excessive working are also more likely to take on student debt to finance their education.  We are working to increase need based grant aid at the state and federal levels in order to decrease the amount of time students need to spend at work while in school.