Student Debt…How Much is Too Much?

by Debt Destroyer on December 10, 2008

student-debt-portsmouthAccording to the local public radio station, South Dakota students carry the highest debt load in the nation.  I was shocked to hear this for a couple of reasons:

  1. South Dakota Universities (public ones) are very affordable. For example, I’m currently enrolled in 17 credits (6 graduate, 11 undergrad) and tuition & books totaled slightly less than $4000.
  2. South Dakota incomes aren’t that high. So if these students are going deep in debt only to get a low paying job, they are setting themselves up for disappointment.

Perhaps because of #2 above, I guess I shouldn’t be surprised that students are needing help to afford school. Most people here don’t make much money, so of course they’d need help to pay for school.  Heck I just took out a $7750 loan to help me go back to school (and me & my wife still owe around $6,000 from our first go around with school).

So I probably shouldn’t be shocked at all.

According to the Quick Fact Section at The Project on Student Loan Debt, borrowing is becoming more prevalent.

By the time they graduate, nearly two-thirds of students at four-year colleges and universities have student loan debt (66.4% in 2004). In 1993, less than one-half of four-year graduates had student loans.

In addition to the number of students needing help increasing, the amount they need to borrow is also increasing.

Over the past decade, debt levels for graduating seniors with student loans more than doubled from $9,250 to $19,200 – a 108% increase (58% after accounting for inflation).

But at the same time the news is talking about South Dakota having the highest student debt burden, I also remember hearing stories about how this fall’s enrollment in South Dakota schools was the highest ever.  So clearly people are OK with borrowing for school.

But are those days near an end?

During Thanksgiving, my wife’s cousin was telling us about her experience at college, she’s a freshman going into social work.  This girl’s Mother joked that she should be on the lookout for a rich husband since social work is not a very lucrative field.  But in all seriousness, I can see this being a concern for those low-paying fields that require a college degree.

I know that I hope to not have to borrow any more money just to land a teaching job.

But I guess it probably wouldn’t be so bad except when you add on credit card debt and a car payment, fresh college graduates can find themselves behind the financial 8-ball in no time.

So Happy Rock readers, what do you think about all of this?  If you went to college, did you need a student loan?  If so, was it worth it?  And to what level do you think we’ll keep borrowing to go to school?

I look forward to your insightful comments.

Until next time,


{ 6 comments… read them below or add one }

P.North December 10, 2008 at 5:45 am

My experience is that when i did go to college i couldn’t survive without a loan. Like you said in your post you can loan a big amount of money through credit cards and loans. It is easier to loan money than finding a job to pay the money that you are in debt for. And that is the problem i think, it is to easy to loan a big amount of money. I am having a decent job now so i am going to do alright but i made some high debts. Think twice for you loan money.


tiffanie December 10, 2008 at 8:43 am

by the time i get my associate’s degree in june of ’09, i will be somewhere near $15,000 in student loan debt…just for 2 years of classes. i go to a private business school and it’s kind of pricey and i don’t have any other financial help, so it’s ALL on loans. *sigh* i don’t like it, but i know w/o a degree i’ll be working part time retail forever…


collegeloanconsultant December 10, 2008 at 9:34 am

South Dakota stands out among states for the way it distributes state financial aid to students. Virtually all of it is merit aid. There is no state grant for financial need. Therefore, students who want a college education but cannot meet the merit requirements, may be forced to borrow more than students in other states.


Debtfree2009 December 10, 2008 at 11:08 am

My husband and I both went to school on complete academic scholarships. My son is a college freshman and his first choice school offered him some scholarship money and his second choice offered him a full scholarship. He took the full scholarship. He is very much aware of loans and has decided to do everything he can to not create student loan debt.

We do have a college fund that he is hoping he won’t need until graduate school.

I really wish there was some mandate that students had to be fully aware of what they are getting into. I also think that the amount of student loan can be greater if the degree is worth more. A $50,000 student loan for teaching degree is a lot different than $50,000 for a chemical engineering degree.


Travis December 15, 2008 at 4:08 pm

I racked up around $17,000 in student loan debt. I graduated in December of 2002 and still owe over $12,000. Its just one of those payments I don’t worry too much about because I have so long to pay it off. I’m married and have to put any extra money towards paying off our car and furnishing our 2 year old home. My wife only has about $2,500 and one of our goals for 2009 will be to pay hers off. Now sure when we’ll get to mine.


Debt Destroyer December 19, 2008 at 2:41 am

Thanks for all the comments.

@P.North – Thinking twice before going in debt is always good advice.

@tiffanie – I hear ya on the degree equaling a better job.

@ collegeloanconsultant – thanks for the info. That is good to know.

@Debtfree2009 – Good for your family on getting to go to college on scholarships. You all must be brainiacs! I totally agree with your last point. It ties in with my comment to tiffinie. Degrees can help land jobs, but is it wise to go in deep debt to get low paying job?

@Travis – Good luck with paying off your wife’s Student Loan? It sounds like you’re doing pretty good on yours too.


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