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Maine college graduates have one of the highest debt burdens in the country to look forward to, according to the Project on Student Debt.
Coordinated by the Institute for College Access and Success, the Project on Student Debt is intended to improve college students’ financial literacy. According to projectonstudentdebt.org, “the Project’s goal is to identify cost-effective solutions that expand educational opportunity, protect family financial security and advance economic competitiveness” of college graduates.
The project obtained its data from the National Postsecondary Student Aid Survey, which is conducted every four years by the U.S. Department of Education. The most recent survey, conducted in 2008, showed that 67 percent of graduates from four-year institutions carried student loan debt. The graduates had an average debt of $23,200.
The website reports 65 percent of Maine college graduates carry student debt after graduating from a four-year institution, which averages to a debt of $29,143 per person. This level of student loan debt is 18 percent higher than the national average.
Maine ranks third for the highest average debt, just behind New Hampshire, where 72 percent of graduates have student loan debt that averages to $29,443; and Washington, D.C., where 51 percent of graduates have student loan debt that averages to $30,033.
Maine’s high debt follows a trend in the Northeast, with four states in New England ranking in the top ten for average debt. While all New England states are above the national average, Massachusetts ranked closest to the national average with an average debt of $24,484 per person after graduation. In addition, student debt for 2009 grads increased by 6 percent over the previous year.
The Project on Student Debt cites the high cost of universities in the Northeast and the large percentage of students attending private colleges there as possible reasons for the region’s high average debt.
The University of Maine is ranked among the highest for public universities in terms of average debt. According to data obtained by the project, 77 percent of UMaine grads graduated with debt in 2009. Those graduates had an average debt burden of $30,824, almost 22 percent higher than the national average.
The high average debt in the Northeast is coupled with some of the lowest Gross Domestic Products (GDP) in the nation, with Maine ranking 43rd in the nation, according to the U.S. Census Bureau. Vermont, which ranked just behind Maine in terms of student debt, has the lowest GDP in the nation.
Elizabeth Bordowitz, CEO of the Finance Authority of Maine, feels lower-than-average state aid coupled with high school costs is a large factor in Maine’s high student debt.
“If there are fewer resources available to students, they look to the ones that are available,” she said. “And the ones that are available are loans.”
FAME offers a set of tips to keep college costs as low as possible to try to avoid massive debt. Martha Johnston of FAME urges students to examine their expenses to keep costs at a minimum.
“The thing I would encourage students to do is examine the expenses that they have,” she said. “It’s important to keep the expenses that you can control down.”
The Project on Student Debt contains possible solutions for the heavy burden on the shoulders of college graduates. It suggests increasing the amount of aid awarded through Pell Grants, which are determined on a basis of need; simplifying the Free Application for Federal Student Aid, which is used to determine a student’s financial situation; and offering incentives for low-income students to either enroll in college or to graduate.
The project says offering incentives, such as increased financial aid in forms other than student loans, may encourage more people to further their education and to subsequently enter the workforce in a strong financial position.
