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Student Loan Debt in Mississippi

WTOK ABC 11 on June 27, 2012
College students in Mississippi are piling up debt before graduation
by Mike McDaniel

It’s probably the most expensive piece of paper ever and because of it, when many colleges graduates make that walk across the stage, degree in hand, the next step is into debt.

“Those who are graduating are graduating with a large student debt burden,” said Jennifer Mishory, deputy directory at D.C. based Young Invincibles, an organization which examines issues facing young adults.

Those debt numbers are rising. In Mississippi, the average student debt is about $22,000, which is just below the national average of about $25,000.

Mishory says overall, there’s about a trillion dollars currently owed by Americans because of federal and private student loans. While most are federal loans, Mishory says it’s those graduates from private for-profit universities who owe the most.

“Certainly these are significant numbers and when you look at it that’s really impacting, for example, a young graduate’s ability to start saving to buy a house,” said Mishory.

In Mississippi, a public college education will soon be a little more expensive after the college board recently approved tuition hikes. That, coupled with fees and books are contributing factors as more students turn to loans.

“Mississippi students in general are paying back their loans,” said Institutions of Higher Education financial aid director, Jennifer Rogers. “We have a fairly low default rate.”

Rogers says although the payback rate is high, student debt is increasing.

“There has been a shift in funding responsibility for higher education,” said Rogers.

Mishory says other states are dealing with the same financial restraints, resulting in less investments from the state level.

“We no longer spend per student the same amount that we once did and that’s why in 1990 about a third of students graduating had debt and now about two thirds of students graduating have debt,” said Mishory.

In Mississippi, that’s 52 percent of public college graduates with student debt, but Rogers says it’s not a crisis.

Student loans often get a bad rap, simply because they’re loans, but not all student loans are bad,” said Rogers. “In fact, they’re possibly the best investments a person can make.”

Wednesday, congressional lawmakers said they’ve come up with a tentative agreement to prevent interest rates on new federal college loans from doubling to 6.8 percent. The deal means a one year extension of the existing 3.4 percent rate, which will affect an estimated 7.4 million students.