The total student debt load hit $1 trillion in April 2012. Further, two-thirds of college seniors graduated with loan debt in 2010, according to The Project on Student Debt.
Despite the publicity that was generated by those numbers, at least one study shows that many student borrowers don’t know how much debt that a diploma will produce. As a result, in June 2012, 10 of the nation’s largest universities announced that as of September 2013, they will give student borrowers an annual update that indicates how much that they owe, what they can expect to repay each month after graduation and where they might find additional assistance.
That announcement came in the wake of Iowa State University research that was released in May 2012, which shows that nearly 40 percent of 800 students who were surveyed underestimated how much that they owe in loans. About 10 percent missed the mark by at least $10,000. About 13 percent didn’t even know that they had student debt.
Financial experts with whom we spoke say the move by the 10 universities is a good step, but they say financial literacy for college should start earlier, say, during a student’s freshman year in high school, to get parents and students to communicate about costs and potential resources.