March 23, 2023

In a Recovering Economy, a Decline in College Enrollment

College enrollment fell 2 percent in 2012-13, the first significant decline since the 1990s, but nearly all of that drop hit for-profit and community colleges; now, signs point to 2013-14 being the year when traditional four-year, nonprofit colleges begin a contraction that will last for several years. The college-age population is dropping after more than a decade of sharp growth, and many adults who opted out of a forbidding job market and went back to school during the recession have been drawn back to work by the economic recovery.

Hardest hit are likely to be colleges that do not rank among the wealthiest or most prestigious, and are heavily dependent on tuition revenue, raising questions about their financial health — even their survival.

“There are many institutions that are on the margin, economically, and are very concerned about keeping their doors open if they can’t hit their enrollment numbers,” said David A. Hawkins, the director of public policy and research at the National Association for College Admission Counseling, which has more than 1,000 member colleges.

The most competitive colleges remain unaffected, but gaining admission to middle-tier institutions will most likely get easier.

Colleges fear that their high prices and the concern over rising student debt are turning people away, and on Wednesday, President Obama again challenged them to rein in tuition increases. Colleges have resorted to deeper discounts and accelerated degree programs. In all, the four-year residential college experience as a presumed rite of passage for middle-class students is coming under scrutiny.

The most striking signs of change came from Loyola University New Orleans and St. Mary’s College of Maryland. After the usual May 1 deadline for applicants to choose a college, Loyola and St. Mary’s each found that their admission offers had been accepted by about one-third fewer students than expected. Both institutions were forced to make millions of dollars in budget cuts and a late push for more enrollment.

Loyola made a flurry of calls to students who had been accepted but had decided to go elsewhere, and had even paid deposits to other colleges. Professors and administrators who usually are not involved in the process made calls, along with the admissions officers, “and we did invite them to see if there was more we could do with aid,” said Roberta Kaskel, the interim vice president for enrollment management.

Many colleges traditionally round out their classes with a small number of students admitted after May 1, often taken from their waiting lists, and miscalculations as big or as damaging as those by St. Mary’s and Loyola are rare. But consultants hired by families to help with the admissions process say that this spring and summer, they have seen more colleges actively hunting for students, reaching out to those who had turned them down, or even to students who had never applied.

“After May 1, I got e-mails from three or four colleges saying, ‘We’ve still got spots, and we’re looking for people to fill them,’ and I don’t remember getting any in the past,” said Lisa Bleich, an admissions consultant in Westfield, N.J.

“I had a client who had committed to one school, and then changed her mind and said she wanted to go to the University of Pittsburgh, where she had also been accepted,” she said. “They weren’t actively looking for more, but they agreed to take her, when a few years ago, they would have said, ‘No, we don’t have any space.’ ”

This summer, Randolph College in Virginia sent letters to students who had not applied but had strong academic credentials, saying that they had “been selected for admission” in the fall, and offering them financial aid. Randolph’s case is unusual, in that it is expanding, but it shows the lengths colleges will go to, to meet their enrollment targets.

“This is the first time we’ve tried this particular approach,” said Mike Quinn, the vice president for enrollment management. “Sometimes offering these qualified students a more generous grant will prompt them to start a conversation with us.”

Don McMillan, an admissions consultant in Boston, said his office fielded calls this week from families in Saudi Arabia and Italy, hoping to find their children places for a school year that, in some cases, is just a month away.

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Economix Blog: Getting More Bang for the Buck in Higher Education


Laura D’Andrea Tyson is a professor at the Haas School of Business at the University of California, Berkeley, and served as chairwoman of the Council of Economic Advisers under President Bill Clinton.

Republicans and Democrats are hurtling toward another bipartisan standoff, this one over rival plans on the interest rates to be charged on subsidized federal loans to help students and their families pay for postsecondary education. Unless Congress can agree on a plan, the interest rate on new loans will double on July 1 to 6.8 percent from 3.4 percent.

Today’s Economist

Perspectives from expert contributors.

While the interest rate on student loans is important, there are much bigger problems in the financing of higher education: soaring tuition costs, the exploding volume of total student debt and shockingly low college completion rates. Americans are spending unprecedented amounts, both privately and publicly, on higher education. What are the returns? Are there ways to get more bang for the buck on this substantial investment in the nation’s future work force?

Students are already borrowing about $113 billion a year, more than twice as much as a decade ago, and student debt now tops $1 trillion. The federal government accounts for nearly 90 percent of all student loans and the Congressional Budget Office estimates that students will take out $1.4 trillion in new federal loans over the next decade.

For young college graduates the unemployment rate is 8.8 percent, and the underemployment rate, which includes those who have given up looking for a job or who are working part time because they cannot find a full-time job, is about 18.3 percent. In addition, many college graduates have been forced to settle for low-paying jobs that do not require a college degree.

Not surprisingly, the default rate on student loans is increasing: more than 13 percent of students whose loans came due in 2009 were in default as of September 2012, meaning that they had missed payments on their loans for more than 60 days.

The rising cost of college and the soaring student debt burden have led some to conclude that a college education is a bad investment for young Americans. Don’t believe the naysayers. The value of a college education as a way to improve lifetime earnings is near an all-time high. The returns to a college education outpace the returns to other investments — stocks, bonds, housing and gold — by sizable margins. A college graduate is almost 20 percentage points more likely to be employed than someone with a high-school diploma. Although the cost of a college degree is 50 percent higher than it was 30 years ago, the increase in lifetime earnings associated with a college degree is now 75 percent higher.

Higher education is also a good investment for the country. In a recent study, the Organization for Economic Cooperation and Development compared the fiscal costs and fiscal benefits of higher education. The fiscal costs include government spending on higher education and forgone tax revenues while students are not working. The fiscal benefits include higher tax revenues from college graduates because of higher incomes and lower outlays for safety-net programs. The bottom line: on average across O.E.C.D. countries, the public return from higher education is about four to one — with a net public benefit of $100,000 per man and about $52,000 per woman. In the United States, the net public benefit is more than $250,000, or five to one for men and about three to one for women. A college degree has not closed the gender pay gap, but it does generate sizable returns for both men and women.

From a fiscal standpoint, cutting government spending on higher education may be penny-wise but it is undoubtedly pound-foolish. That said, there are certainly ways to improve the returns to both private and public spending on higher education, starting with our dismal performance on completion rates.

Almost half of all students who begin college at a two- or four-year institution — about 60 percent of Hispanic and black students — will not get a degree within six years. When students leave college with no credential and huge debt, they are often worse off than when they entered. The average default rate for those with no credential is more than four times the rate for those with a bachelor’s degree.

College is supposed to be the great social equalizer, and the share of low-income students entering college has climbed sharply as a result of federal and state assistance. But despite successful public investment in improving access to higher education, the gap in college completion rates between students from the bottom and top fifths of the income distribution has doubled since the early 1970s. Today, students from the top 20 percent of the income distribution are seven times more likely to graduate than those from the bottom 20 percent. Low-income students are much more likely to end up with crushing debt and nothing to show for it.

What can be done? A report just released by the Center for American Progress contains several worthwhile recommendations. (“300 Million Engines of Growth: A Middle-Out Plan for Jobs, Business and a Growing Economy,” Center for American Progress, June 2013). The first step is greater transparency, and technology as well as disclosure can be helpful here. For students to make wiser choices among competing postsecondary institutions and programs, it must be easier to compare costs, average debt loads, completion and graduation rates, and placement rates after graduation. A bipartisan bill, whose backers include Senators Marco Rubio, Republican of Florida, and Ron Wyden, Democrat of Oregon, would require the Department of Education to provide easy access to clear, current and verified information on every college and university whose students receive federal support.

Transparency isn’t enough, however. A second step is the use of such data by the federal and state governments to hold postsecondary educational institutions accountable for their performance. The federal government has an immense potential stick to influence performance: it could withhold financial aid and student loan support for institutions that do not prove their value.

President Obama has called on Congress to incorporate performance standards on affordability, debt loads and completion rates into the accreditation process that determines the eligibility of institutions for federal student support. The administration has created a “score card” to track performance on these measures. And building on the success of the “Race to the Top” competitions in K-12 education, the administration has proposed grant competitions among states and colleges to improve affordability and completion rates. Several states are already experimenting with programs that link aid for higher education to measures of student performance.

A recent report by a coalition of the leading nonprofit higher-education associations identified college completion rates as the top priority, calling for more program flexibility, easier credit transfers and more online courses to enable more timely completion of degrees, especially among nontraditional students juggling the demands of education, work and family. Of course, higher completion rates in themselves do not speak to the quality of the education provided, so attention must be paid to how colleges make it easier for students to complete degrees. For example, the availability of stand-alone open online courses is no guarantee that students will complete their course requirements and get a degree. Online courses and e-mentoring systems must by packaged into programs that include scalable and significant faculty-student interactions leading to meaningful degrees.

Despite its rising cost, college education remains a great investment both for students and for the country. But there is much more that can be done to increase the value of this investment by improving completion rates through greater transparency and accountability, greater program flexibility and the growth of well-planned online courses and degree programs.

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U.S. Adds Only 88,000 Jobs; Jobless Rate Falls to 7.6%

The nation’s employers increased their payrolls by 88,000 last month, compared with 268,000 in February, according to a Labor Department report released Friday. It was the slowest pace of growth since last June and less than half of what economists expected.

It was also the third consecutive spring in which employers tapered off their hiring, even after adjusting the numbers for seasonal changes. Economists have started calling the phenomenon the “spring swoon.”

“The general tenor of the report underscores what our overall data have been indicating – a growing but not accelerating economy,” said Steve Blitz, director and chief economist at ITG Investment Research.

The unemployment rate, which comes from a different survey, ticked down to 7.6 percent from 7.7 percent, but primarily because more people dropped out of the labor force, not because more people got jobs.

The labor force participation rate has not been this low — 63.3 percent — since 1979, a time when women were less likely to be working. Baby Boomer retirements may account for part of the slide, but discouragement about job prospects in a mediocre economy still seems to be playing a large role, economists say.

“The drop in the participation rate has been centered on younger workers,” said Joshua Shapiro, chief economist at MFR Inc., “many of whom have given up hope of finding a decent job and are instead continuing in school and racking up enormous amounts of student debt, which has contributed to the recent surge in consumer credit outstanding.”

Stock market indexes were down sharply at the start of Friday’s trading.

Still, as always, economists cautioned not to read too much into one month’s report, since the numbers will inevitably be revised.

“Remember that we’ve had a pattern of upward revisions,” said John Ryding, the chief economist at RDQ Economics, noting that the government on Friday revised January and February’s net growth upward by a total of 61,000 jobs.

“Before we read too much into it, bear in mind we have at least two more cracks of the whip before the number is really finalized,” he added.

March’s job gains were concentrated in professional and business services and health care, while the government again shed workers, as it has been doing for most of the last four years. Economists expect more government layoffs in the months ahead as the effects of Congress’s across-the-board budget cuts make their way through the system. This so-called “sequestration” process does not seem to have appreciably affected the numbers in March though. Meanwhile, some policy makers have started to publicly address deficiencies in the quality of the jobs being created by the private sector, in addition to their quantity.

“It’s important to look at the types of jobs that are being created because those jobs will directly affect the fortunes and challenges of households and neighborhoods as well as the course of the recovery,” said Sarah Bloom Raskin, a member of the Federal Reserve Board, in a recent speech.

Relatively low-wage sectors like food services and retail have accounted for a large share of the job growth in the last few years; a report in August from the National Employment Law Project, a liberal advocacy group, found that a majority of jobs lost during the downturn were in the middle range of wages, and a majority of those added during the recovery have been low paying.

Ms. Raskin also expressed concern about temporary-help jobs, which account for a growing share of total employment.

Usually an increase in temp hiring is considered a good thing, at least at the start of a recovery, because it indicates that employers are thinking about taking on permanent workers. So far, though, employers seem to be sticking with those temporary contracts.

“Temporary help is rapidly approaching a new record,” said Diane Swonk, chief economist at Mesirow Financial, who noted that there was also a rapid increase in temp hiring during the boom years of the ‘90s. “That of course means more flexibility for employers, and less job security for workers.”

Perhaps more distressingly, 7.6 million workers who want full-time work still can find only part-time work, and their missing work hours do not count toward the official unemployment rate. The number of workers in involuntary unemployment fell slightly from February, but is still about where it was a year ago.

“You gotta do what you gotta do,” said Amie Crawford, 56, of Chicago. After four months spent fruitlessly looking for a new job as an interior designer, a middle-class career she had practiced for 30 years before the recession, she accepted a part-time cashier position at a quick-service health food cafe called the Protein Bar.

She keeps asking for more hours, but her manager’s response is always the same: “He tells me, ‘I try to give you as many hours as I can, but everybody wants as many hours as they can,’ ” said Ms. Crawford.

People like Ms. Crawford are the lucky ones, at least compared to the workers who are still pounding the pavement and may have no source of income at all. Long-term unemployment — joblessness lasting more than six months — has been a persistent problem and could permanently affect workers’ skills, networks and employability.

“This seems to be a long-term sleeper crisis too, as we think about long-term unemployed workers who are in midlife and older workers who are likely dipping into retirement savings in order to stay afloat,” said Christine L. Owens, executive director of the National Employment Law Project. “We’re setting ourselves up for somewhere, 10 years down the road, when a lot of retirees who didn’t expect to live in poverty are going to be in poverty.”

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Bucks Blog: Financial Tips for Younger Adults

An article on Friday in The Times focuses on the financial challenges facing younger Americans, who are accumulating wealth at a much slower pace than their parents did.

With stagnant wages, a tough job market and heavy student debt, American under about age 40 have accrued less wealth than their parents did at the same age, even as the average wealth of Americans has doubled over the last quarter-century, according to a new study by the Urban Institute.

The situation is of concern to financial planners and advisers because of what they call the “time value” of money — that is, the earlier you start saving and investing, the more time you have for your assets to grow. If you get a later start, you’ll have less time to catch up. So by getting behind now, young people may find themselves short when they near retirement.

Greg Dorriety, a certified financial planner near Mobile, Ala., said he often advises young adults who are the children of his older clients, and he stresses with them the need to start saving — even if it’s as little as $10 a month, if money is tight — to get in the habit. With the uncertainty about the future of Social Security benefits, he said, “There’s a high likelihood they’re going to be personally accountable for their own retirements.”

Younger people who are able should do the obvious things like contributing as much as they can to their 401(k) or profit-sharing plans, he said, if their employer offers it.

He also advises younger adults with higher incomes not to aim to buy a big, expensive house right away, because they are likely to move around before settling down. Ditto for fancy cars. But if they want the cars, he said, he urges them to buy “gap” insurance, which will cover the difference between what they owe on their car and what it’s worth, if the car should be totaled in accident.

Timothy Maurer, a financial planner and personal finance educator in Baltimore, said younger adults often get caught up in instant gratification, buying cars, furniture and electronics on installment debt as soon as they get their first job and apartment. When added to their student loans, the burden can become crushing, leaving little for savings. He said he encouraged young people to reframe the way they think about debt and savings.

For instance, he said, he suggests taking only as much college debt as they can reasonably expect as their first year’s salary in their chosen field. And rather than simply trying to save 10 percent of their salary indefinitely,  he advises saving more — 20 percent — when they are in their 20s. When they get married and have children, it will get harder to save, and they may struggle to save even that 10 percent.

Jonathan Geiger, an adviser with Charles Schwab in Manhattan, said he urged younger clients to have a written budget: “Know what your expenses are.” If your cash flow isn’t covering your expenses, you need to cut back — perhaps on treats like dining out and daily coffees. He said he also recommends that young people pay down high-interest rate debt, like credit card balances, first, and consider transferring the balance to a card with a lower interest rate if they can’t pay it off monthly. If clients work for a company that doesn’t offer a workplace retirement plan, they can consider an I.R.A.

If you are under 40, let us know if you are able to save and invest for the future — or is it too difficult right now?

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DealBook Column: Occupy Wall Street: A Frenzy That Fizzled

Occupy Wall Street protesters gathered on Monday near Zuccotti Park in Lower Manhattan.Marcus Yam for The New York TimesOccupy Wall Street protesters gathered on Monday near Zuccotti Park in Lower Manhattan.

It will be an asterisk in the history books, if it gets a mention at all.

A year ago this week, the Occupy Wall Street movement got under way in Zuccotti Park in Lower Manhattan. The loose group of protesters, frustrated by the economic downturn, sought to blame Wall Street and corporate America for many of the nation’s ills.

While the movement’s first days did not receive much news coverage, it soon turned into a media frenzy, with some columnists comparing its importance to that of the Arab Spring, which led to the overthrow of leaders in several Middle Eastern and African countries, spurred by social media. Images of the Wall Street protesters getting arrested were looped on news channels and featured on the covers of newspapers. Big banks — and the famous Charging Bull statue that is an icon of Wall Street — were fortified with barricades. By the end of the year, Time magazine had named the protester its Person of the Year, perhaps rightly given the revolutions taking place around the world, but the magazine also lumped Occupy Wall Street in among the many meaningful movements taking place.

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But now, 12 months later, it can and should be said that Occupy Wall Street was — perhaps this is going to sound indelicate — a fad.

That is not to say that Occupy Wall Street had no impact. It created an important national conversation about economic inequality and upward mobility. The chant, “We are the 99 percent,” has become part of the lexicon. Its message has subtly been woven throughout the Obama administration’s re-election campaign, in the Democrats’ position on everything from taxes on the highest earners to the soaring levels of student debt.

But consider this: Has the debate over breaking up the banks that were too big to fail, save for a change of heart by the former chairman of Citigroup, Sanford I. Weill, really changed or picked up steam as a result of Occupy Wall Street? No. Have any new regulations for banks or businesses been enacted as a result of Occupy Wall Street? No. Has there been any new meaningful push to put Wall Street executives behind bars as a result of Occupy Wall Street? No.

And even on the issues of economic inequality and upward mobility — perhaps Occupy Wall Street’s strongest themes — has the movement changed the debate over executive compensation or education reform? It is not even a close call.

Is there still anger and angst over the horrible unemployment problem in the United States? Absolutely. But that sentiment, and whatever conversation has emerged as result, was going to happen with or without Occupy Wall Street.

The Wall Street banks themselves hardly felt the pinch of the protesters, beyond considering them a nuisance and an additional security cost. Despite campaigns for customers to move money to smaller, community banks, few customers did.

The biggest victory, perhaps, that the movement can claim was a decision by Bank of America and other big banks to scrap plans to charge additional fees for use of debit cards. The protesters also brought awareness to banks’ foreclosure practices, and even successfully petitioned to keep some struggling borrowers in their homes.

In the fall of 2011, questioning anything about the movement was not too popular. Doing so was an invitation for withering ridicule. (I experienced it firsthand after I filed what I thought was a relatively respectful column about the protests from Zuccotti Park.)

The problem with the movement, as many other columnists have pointed out before, was that its mission was always intentionally vague. It was deliberately leaderless. It never sought to become a political party or even a label like the Tea Party.

By the second or third time I went down to Zuccotti Park, it became clear to me that Occupy Wall Street, which began with a small band of passionate intellectuals, had been hijacked by misfits and vagabonds looking for food and shelter.

Given the way the organization — if it can be called that — was purposely open to taking all comers, the assembly lost its sense of purpose as various intramural squabbles emerged about the group’s end game.

I vividly remember watching one protester with a sign that read “Google = Jewish Billionaires.” Another protester ran over and ripped up the poster. The messages had become decidedly too mixed.

Eliot L. Spitzer, the former New York governor and former attorney general who has been a longtime supporter of Occupy Wall Street, recently reflected on the legacy of the movement.

“They are redefining and rebalancing our political discourse,” he wrote in Slate. “To all those who are dissatisfied because the Occupy movement did not grow into the complete political theory or social agenda that some wished, I say: Give credit where credit is due.”

Fair enough. But even Mr. Spitzer questioned, “We do have to ask, ‘Now what?’ ”

A version of this article appeared in print on 09/18/2012, on page B1 of the NewYork edition with the headline: Occupy Wall Street: A Frenzy That Fizzled.

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Economix Blog: Judith Scott-Clayton: Student Loan Debt: Who Are the 1%?


Judith Scott-Clayton is an assistant professor at Teachers College, Columbia University.

A continuing refrain of Occupy Wall Street protesters has been “student debt is too damn high,” as James Surowiecki wrote in The New Yorker. In some cases — like for the college graduate profiled in a recent article in the Chronicle of Higher Education who has $100,000 in debt and uncertain job prospects — this is unarguably true. But such cases make for dramatic reading precisely because they are so rare.

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The first thing to note is that most of those with that much debt have graduate degrees; it is difficult to accumulate that much debt in an undergraduate program. The chart below shows the percentage of beginning undergraduate students who, six years later, had accumulated more than the indicated levels of debt.

Only one-tenth of 1 percent of college entrants, and only three-tenths of 1 percent of bachelor’s degree recipients, accumulate more than $100,000 in undergraduate student debt. If you have more than $75,000 in undergraduate debt, you are the 1 percent – just not the 1 percent you might have been hoping for.

U.S. Department of Education, Beginning Postsecondary Students Survey (2009)

Even among recipients of bachelor’s degrees, 90 percent manage to graduate with less than $40,000 of debt. What happened to the other 10 percent is no particular mystery: they are less likely to come from wealthy families, but they attended pricier schools and paid for more years of tuition (see chart below). Compared with other graduates, these students are 20 percentage points more likely to have attended schools costing $20,000 or more a year (including room and board), and 20 percentage points less likely to have attended a public institution. Ten percent attended a private for-profit institution, compared with only 1 percent of their lesser-borrowing peers. High-borrowing students also took significantly longer to finish their degrees.

U.S. Department of Education, Beginning Postsecondary Students Survey (2009)

With a bachelor’s degree, even $40,000 may be a manageable level of debt over the long term. But for those who are unemployed – including 9.1 percent of the 20- to 24-year-old college graduate labor force and 20.4 percent of their peers with no college degree, according to a recent report – even much smaller amounts may be unmanageable in the short term.

Those who are struggling with their payments may be able to take advantage of deferments and forbearance provisions on the federal portion of their loans to help get them through the economic downturn. They probably should not hold their breath waiting for Congress to pass legislation forgiving all student loan debt, an idea some Occupy Wall Street protesters have advocated but which economists have panned.

In an effort to respond to this proposal, the Obama administration recently took several executive actions that will lower repayment burdens for some borrowers; for those enrolled in the income-based repayment plan, the changes could reduce monthly payments by a third.

Surprisingly, though, neither the protest movement nor the administration is talking about the imminent doubling of student loan interest rates. Congress temporarily reduced interest rates to 3.4 percent for subsidized loans originating in 2011-12, but beginning next summer the rate for new loans will rise to 6.8 percent.

I asked Mark Kantrowitz, publisher of and, why there hadn’t been more pressure to extend the interest rate reduction, especially given that the government turns a net profit on its student loan programs. He noted that these profits help pay for Pell grants and other student aid programs and said that many student aid advocates feared that any extension of loan interest reductions would necessitate larger cuts elsewhere.

Given a choice between allowing interest rates to rise or cutting Pell grants, he said in an e-mail, “cutting the interest benefit is the lesser of two evils.”

This is probably true. Unlike changes in Pell grants, changes to the interest rate affect loan repayments years in the future, not students’ ability to pay for college now. And because the change only applies to new loans, many people most likely to be affected are primarily occupying high school classrooms, not Zuccotti Park.

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Bucks Blog: Thursday Reading: Student Debt Grew 5% Last Year

November 03

Thursday Reading: Student Debt Grew 5% Last Year

Student debt grew again last year, cellphone apps give speed dating new meaning, hotels offer Veterans Day deals and other consumer-focused news from The New York Times.

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Burden of College Loans on Graduates Grows

While many economists say student debt should be seen in a more favorable light, the rising loan bills nevertheless mean that many graduates will be paying them for a longer time.

“In the coming years, a lot of people will still be paying off their student loans when it’s time for their kids to go to college,” said Mark Kantrowitz, the publisher of and, who has compiled the estimates of student debt, including federal and private loans.

Two-thirds of bachelor’s degree recipients graduated with debt in 2008, compared with less than half in 1993. Last year, graduates who took out loans left college with an average of $24,000 in debt. Default rates are rising, especially among those who attended for-profit colleges.

The mountain of debt is likely to grow more quickly with the coming round of budget-slashing. Pell grants for low-income students are expected to be cut and tuition at public universities will probably increase as states with pinched budgets cut back on the money they give to colleges.

Some education policy experts say the mounting debt has broad implications for the current generation of students.

“If you have a lot of people finishing or leaving school with a lot of debt, their choices may be very different than the generation before them,” said Lauren Asher, president of the Institute for Student Access and Success. “Things like buying a home, starting a family, starting a business, saving for their own kids’ education may not be options for people who are paying off a lot of student debt.”

In some circles, student debt is known as the anti-dowry. As the transition from adolescence to adulthood is being delayed, with young people taking longer to marry, buy a home and have children, large student loans can slow the process further.

“There’s much more awareness about student borrowing than there was 10 years ago,” Ms. Asher said. “People either are in debt or know someone in debt.”

To be sure, many economists and policy experts see student debt as a healthy investment — unlike high-interest credit card debt, which is simply a burden on consumers’ budgets and has been declining in recent years. As recently as 2000, student debt, at less than $200 billion, barely registered as a factor in overall household debt. But now, Mr. Kantrowitz said, student loans are going from a microeconomic factor to a macroeconomic factor.

Susan Dynarski, a professor of education and public policy at the University of Michigan, said student debt could generally be seen as a sensible investment in a lifetime of higher earnings. “When you think about what’s good debt and what’s bad debt, student loans fall into the realm of good debt, like mortgages,” Professor Dynarski said. “It’s an investment that pays off over the whole life cycle.”

According to a College Board report issued last fall, median earnings of bachelor’s degree recipients working full time year-round in 2008 were $55,700, or $21,900 more than the median earnings of high school graduates. And their unemployment rate was far lower.

So Sandy Baum, a higher education policy analyst and senior fellow at George Washington University, a co-author of the report, said she was not concerned, from a broader perspective, that student debt was growing so fast.

Indeed, some economists worry that all the news about unemployed 20-somethings mired in $100,000 of college debt might discourage some young people from attending college.

A decade ago, student debt did not loom so large on the national agenda. Barack and Michelle Obama helped raise awareness when they spoke in the presidential campaign about how their loan payments after graduating from Harvard Law School were more than their mortgage payments.

“We left school with a mountain of debt,” Mr. Obama said in 2008. “Michelle I know had at least $60,000. I had at least $60,000. So when we got together we had a lot of loans to pay. In fact, we did not finish paying them off until probably we’d been married for at least eight years, maybe nine.”

Even then, Mrs. Obama said, it took the royalties from her husband’s best-selling books to help pay off their loans.

In 2009, the Obama administration made it easier for low-earning student borrowers to get out of debt, with income-based repayment that forgives remaining federal student debt for those who pay 15 percent of their income for 25 years — or 10 years, if they work in public service.

But if the Obamas’ experience highlights the long payback periods for student debt, their careers also underscore the benefits of a top-flight education.

“College is still a really good deal,” said Cecilia Rouse, of Princeton, who served on Mr. Obama’s Council of Economic Advisers. “Even if you don’t land a plum job, you’re still going to earn more over your lifetime, and the vast majority of graduates can expect to cover their debts.”

Even believers in student debt like Ms. Rouse, though, concede that hefty college loans carry extra risks in the current economy.

“I am worried about this cohort of young people, because their unemployment rates are much higher and early job changing is how you get those increases over their lifetime,” Ms. Rouse said. “In this economy, it’s a lot harder to go from job to job. We know that there’s some scarring to cohorts who graduate in bad economies, and this is the mother of bad economies.”

And there is widespread concern about those who borrow heavily for college, then drop out, or take extra years to graduate.

Deanne Loonin, a lawyer at the National Consumer Law Center, said education debt was not good debt for the low-income borrowers she works with, most of whom are in default.

Unlike most other debt, student loans generally cannot be discharged in bankruptcy, and the government can garnish wages or take tax refunds or Social Security payments to recover the money owed.

Students who borrow to attend for-profit colleges are especially likely to default. They make up about 12 percent of those enrolled in higher education, but almost half of those defaulting on student loans. According to the Department of Education, about a quarter of students at for-profit institutions defaulted on their student loans within three years of starting to repay them.

“About two-thirds of the people I see attended for-profits; most did not complete their program; and no one I have worked with has ever gotten a job in the field they were supposedly trained for,” Ms. Loonin said.

“For them, the negative mark on their credit report is the No. 1 barrier to moving ahead in their lives,” she added. “It doesn’t just delay their ability to buy a house, it gets in the way of their employment prospects, their finding an apartment, almost anything they try to do.”

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Bucks: Bribing Children to Spend Less on Tuition

Bucks - Money Through the Ages

Zac Bissonnette is a senior at the University of Massachusetts and the author of “Debt-Free U.” In an article in the special section this week on Money Through the Ages, he offered advice for a student grappling with a choice of taking on student debt or starting at a community college.

One of the most common questions I get from parents is this: I agree with your message that student loans are evil and that my child won’t suffer by going to a public four-year college or starting at a community college.

But how can I convince my kid of that?

Here’s the problem: Your 17-year old is brain-damaged. Well, not really brain-damaged. But according to the pediatric neurologist Frances Jensen, the frontal lobes in adolescents are not yet fully connected. She told NPR: “It’s the part of the brain that says: ‘Is this a good idea? What is the consequence of this action?’ It’s not that they don’t have a frontal lobe. And they can use it. But they’re going to access it more slowly.”

In other words, adolescents are less equipped than adults to make a rational judgment about the consequences of borrowing $20,000, $30,000, $40,000. This is why teenagers aren’t allowed to buy cigarettes or alcohol, rent cars, or gamble.

But they sure can borrow $100,000 to pay for a women’s studies degree from New York University. I’ve written at great length about the consequences of student loan debt: a federal default rate of 20 percent and rising, constrained career options, the fact that student loans can’t be discharged in bankruptcy, etc. I’ve also written about the strong evidence that starting at a community college will not affect your child’s career or life prospects in any way. And then there’s the Princeton study that found that career earnings track with aptitude, not the brand of sheepskin.

But if your child doesn’t find these arguments compelling because of an underdeveloped frontal lobe (really the only reason anyone could ever disagree with me about anything), here’s a back-up plan: Offer your child a $1,000 (or whatever) gift card to Neiman Marcus (or Bath Body Works — which would be easily the most awesome place to spend $1,000) in exchange for avoiding student loan debt and going to a college that’s affordable. Twenty years from now, you will both look back on it as the best $1,000 you ever spent.

I know, I know. This is unlikely to get you a nomination for the Congressional Medal of Principled Parenting. But think of it as the financial equivalent of a light tap on your 2-year-old’s hand before he sticks it into an electrical socket. It doesn’t make you a bad parent, and it just may save your child’s financial life.

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