I am writing this in response to “Student loan debt remains imminent hurdle for seniors” (The Miscellany News, 04.03.14), as I would like to provide information regarding the student loan debt for Vassar graduates. The article mentioned that the national average student loan debt for those graduating in 2012 was $29,400; however, for the Vassar class of 2012 the average student loan debt was far lower at $17,234. With the average starting salary of our Vassar graduates between $35,000 and $40,000, the monthly payment of $198 will comprise approximately six percent of their monthly salary, which is far below industry standards of 20 percent of one’s gross income being applied towards debt payments.
The article mentioned the program Pave, which offers funding opportunities for recent graduates; however, the repayment rate may be as high as 10% of your current and future earnings, again a much higher rate than the standard repayment option for your student loans.
There has also been an increasing national concern regarding the overall default rate on student loans; however, Vassar’s cohort default rate has been below one percent for the past ten years. This default rate continues to be one of the lowest in the country, and below that of many of our peer schools.
Though the thought of beginning repayment may seem daunting, there are options available to help you be successful at repaying your loan debt. For example, the Federal Government offers a variety of repayment plans, which range from a standard repayment ($198 per month in our current example) to repayment plans based on a percentage of your income. In addition, there are opportunities to defer payments based on having a low or no-paying job.
In conclusion, please make sure you research all financial options available to you in order to make the best decision for you in regards to both your short term and long term goals.
-Jessica Berner, Director of Financial Aid at Vassar College.