Student debt levels off

Undergraduate student loan debt at UW–Madison is leveling off, according to the Office of Student Financial Services.

The average loan debt for students who earned their bachelor’s degrees in the 2000-01 academic year was $15,140, down $810 from the previous year. Average loan debt also dropped $771 from the 1997-1998 academic year to the 1999-2000 academic year.

The percentage of graduating students with debt also decreased. This figure has remained constant, around 46 percent, since the 1997-1998 academic year, but dropped to 43.2 percent in the 2000-01 academic year. The actual number of students graduating with debt has increased, but this is reflected in the increase in the total number of graduating students.

Average loan debt for minorities has also decreased substantially. Among all minority groups, average loan debt has decreased from $17,646 in 1999-2000 to $13,771 in 2000-01.

“Undergraduate student loan debt appears to have leveled off,” says Steve Van Ess, director of student financial services. “This may be due, in part, to the fact that the federal government has not increased the annual or cumulative loan limits in recent years.”

Van Ess also says that there is evidence for increasing credit card and other debt among students, which is not reflected in the annual report prepared by the Office of Student Financial Services.

The average student loan debt for other students who graduated in 2000-01, compared to 1999-2000, are as follows: Master’s degree, $22,627, down from $23,576; Ph. D., $30,305, up from $28,780; Law, $50,864, up from $50,298; Medicine, $98,000, down from $102,253; Veterinary Medicine, $64,024, up from $59,697; and the doctor of pharmacy program, $44,134, up from $29,599.

The Office of Student Financial Services also reported that student loan default rates at UW–Madison remain well below the national average.

The default rate on the Stafford loan, the most common form of student loan, was 1 percent in 1998-99, the most recent year for which information is available. Wisconsin’s average default rate was 3.4 percent, the Midwest region’s average was 5.3, and the national average was 5.6 percent.

“UW-Madison admits highly qualified students with an excellent chance of academic success and provides them with a quality education,” says Van Ess. “They are then able to find reasonable employment and repay their student loans.”