Total student loan debt may top $1 trillion this year, having previously exceeded total credit card debt for the first time last year, The New York Times reported Tuesday.
Mark Kantrowitz, who publishes financial aid and scholarship websites FinAid.org and FastWeb.com, collected the data. Federal and private student loan debt totals currently exceed $903 billion, according to FinAid.org.
As the University prepares for state funding slashes, potential tuition increases and cuts to scholarships, students may have to borrow even more in coming years, said Tom Melecki, UT director of Student Financial Services.
“This year, undergraduates received $180 million through grants and scholarships. However, UT is anticipating a possible cut of $30 million in grants and scholarships next year, which will leave some students to look for alternative funding sources,” Melecki said.
The cut will largely affect merit-based scholarships rather than need-based ones. Melecki said students should still search for scholarships and fill out the Federal Application for Student Aid. He also advised students to look into work-study opportunities and part-time jobs.
“Studies show students who work during the week have higher GPAs and graduation rates,” Melecki said.
The Office of Student Financial Services reports that undergraduates this year have borrowed $122 million through federal student loans, and their parents have borrowed $61 million through federal parent loans.
Senior finance lecturer Greg Hallman said that getting a degree is an important investment in a young person’s future.
“Although it is discouraging to graduate with loans in a bad economy, the economy is cyclical and will likely bounce back sooner than later,” Hallman said.
Business graduate student Brian Pfitzinger said having student loans was excellent because they made him responsible to managing his expenses.
“The cost of education can be supported financially because our country’s economic viability depends on an educated work force,” Pfitzinger said.
Melecki said that students who graduate from UT obtain a higher average salary than other college graduates, so it may be easier for UT alumni to pay their debt back. However, Melecki advised not to “go overboard” and to borrow only what they need to attend UT and no more.