In The Lead: Top 50 / Pittsburgh region's top colleges based on revenue

Graduates with bachelor's degrees earn more and are twice as likely to be employed

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While a college education can play a critical role in career and financial success, an increasing number of young adults are leaving school with more than just a diploma.

The Consumer Financial Protection Bureau estimates student loans outstanding total about $1.2 trillion, spread among 40 million borrowers for an average debt of nearly $30,000 per graduate. Total student debt outstanding has quadrupled since 2003, and during that time frame student debt has earned the highest delinquency rate of any consumer loan category.

"Borrowers default for a variety of reasons, including failure to graduate," said Mark Kantrowitz, publisher of Las Vegas-based, an educational resource for parents and students. "Students who drop out are four times more likely to default on student loans than students who graduate."

Even as college costs continue to rise, study after study has shown the returns on a college education still outweigh the cost, making it a good investment. College graduates with bachelor's degrees earn an average of $1.2 million more in their lifetimes than those without a degree, according to U.S. Census data, and also are about twice as likely to be employed.

But the debt associated with earning a degree can be a challenge for young people entering the workforce at a time when good-paying jobs are tight and wages are generally stagnant.

According to the Pew Research Center, 19 percent of U.S. households had student debt as of 2010, and 68 percent of 2012 college graduates had student loan debt. Pew Research found student debt was more common with younger families, where 40 percent of households headed by someone younger than 35 were juggling student loans along with other essential bills.

Mr. Kantrowitz said the current cohort default rate for federal student loans is 10 percent. The cohort default rate is defined as the percentage of recent college graduates who enter the repayment phase and end up defaulting on their student loans within a year.

The cohort default rate is higher than it has been in recent years. Last year's rate was 9.1 percent. The low point was in 2003 when the cohort default rate was 4.5 percent.

The peak was in 1990 when it hit 22.4 percent, right around the time federal officials instituted current rules that make institutions — mainly for-profit institutions — with high default rates ineligible for federal student aid.

"Students who graduate with a bachelor's degree or more advanced degree, on average, still have higher income and a lower unemployment rate than individuals who have just a high school diploma," Mr. Kantrowitz said.

"Despite the rising cost of higher education and the anemic growth in grants, college is still a worthwhile investment for most students."

— Tim Grant: or 412-263-1591.

First Published May 13, 2014 11:10 AM

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