By John Clark
The Class of 2013 could be in for a big surprise this fall, as the average college graduate will leave school with more than $35,000 in debt, according to an alarming report from CNN.
Sources note that the total price tag includes student loans, credit card debt, and personal loans, and it represents a significant leap from the debt load belonging to students only a few years ago.
Bulk of College Graduate Debt is Owed to Federal Government
According to sources, most of the debt accrued by the Class of 2013 has taken the form of government loans, as the average graduate owes the government $26,000.
But the average graduate is also carrying roughly $3,000 in credit card debt, as well as several thousand dollars in personal debt, which usually includes loans from family members, sources say.
And the high debt wasn’t necessarily part of the plan. According to Keith Bernhardt, vice president of college planning at Fidelity Investments, the study found that students “are still surprised at the level of debt they’re graduating with.”
The fact that the debt comes as a surprise “suggests we still have a long way to go in terms of having conversations about planning for college, saving for college and figuring out the best place to go [to college,” said Bernhardt.
Indeed, if the trend continues, and more students are forced to file for bankruptcy to shed college debt, parents and students may need to change the way they view their college plans.
Study Shows Many Students Regret Taking out Loans
Sources say the study, which was conducted by Fidelity Investments, revealed that 39 percent of college students would have behaved differently if they had a second chance.
Many students, for example, said they would have started saving extra money earlier in college, researched financial aid options more carefully, or cut down on their college spending.
Remarkably, 12 percent of respondents said they completely regretted their decision to attend college, claiming that the cost of their education didn’t justify its potential rewards.
This seems alarming, but it begins to make more sense when one considers that half of the graduates surveyed said it will take more than nine years to pay off their loans.
And 25 percent of graduates claimed they will have to seek help from parents or family in order to repay some or all of their debt. Moreover, 21 percent of graduates say they will have to find a second job.