Students at Michigan's five largest universities sought more loans to pay for college, according to a Detroit Free Press database.
These students will join recent graduates around the country whose outstanding private and federal education debts have topped $1 trillion, according to the Consumer Financial Protection Bureau. According to the data, as of 2010, students in Michigan have the 11th highest average debt of any state.
From the school years beginning in 2007 though 2009, a higher percentage of students attending the state's most populous schools received federal loans, and those loans were higher on average, each year. Of the 165 schools with data, 119 reported that the majority of their students received federal loans during the 2009-2010 school year.
From the Freep:
"Debt of this magnitude has the potential to slow down the economy significantly, which affects everyone," said Todd Albery, CEO of Detroit-based Quizzle, a credit-information website that's part of the Quicken Loans family.
"Bottom line, if you can't work, you can't repay your loans, if you can't repay your loans, your credit suffers. The end result is pretty obvious."
The rising cost of a college education and this growing debt threaten the state's graduates' future, reports the Free Press. For each graduate with outstanding loans, the monthly increments in which the debt is paid off can make moving out of their parents' home or buying a car unfeasible.
Despite possible delays in financial independence, a higher education is still a good investment. According to the Bureau of Labor Statistics, earning an Associates Degree can cut a graduate's chances of unemployment by a third, compared to a high school diploma alone, and a Bachelor's Degree doubles one's chances of employment.
The U.S. Department of Education recently rolled out a new federal student aid website filled with bilingual resources to help debt-saddled students and graduates such as a budget calculator and videos explaining the loan and grant application processes.
President Obama recently approved annual changes to federal student loans and grants, which included a rare extension of low federal student loan rates. These changes went into effect on July 1.
-Elaine Ezekiel, Michigan Radio News