Following a national trend, student loan debt in New Jersey has more than doubled in the past decade, according to 2018 data reported by Experian.
The credit-reporting firm revealed in a blog post last month that New Jersey students owe nearly $43 billion in loans for higher education. That is a 126 percent increase from the $18.8 billion owed in 2008.
The impact of student loan debt can be seen across the economy, according to experts. A 2018 report, “Buried in Debt,” showed that people who have student loans are putting off major life milestones such as marriage, children and home buying, and are struggling to make ends meet while paying off debt.
“There’s a whole generation that has been unable to begin their journey of the American dream,” said Daniel Roccato, adjunct professor of economics at Rutgers University.
Nationally, student loan debt has hit an all-time high of $1.36 trillion. According to Experian, student loan debt is one of the most significant and widespread financial burdens in the country, behind mortgages. Home loans account for $9.4 trillion.
Roccato said the evidence is more than anecdotal. He said the Federal Reserve has conclusively determined homeownership rates and the ability of millennials — those born between 1981 and 1997 — to purchase homes have been negatively impacted by student loan debt.
“If there’s a whole generation of folks who are hurting financially, unable to fully engage in the economy, that clearly hurts all of us,” he said.
According to Experian, New Jersey’s student loan debt growth was on par with the national average. South Carolina saw its total student loan debt increase by 315 percent.
The average student loan borrower has $22,600 in debt associated with higher education, up 20 percent in the past three years. Experian reports that although overall debt is increasing, a good sign is that more borrowers are paying on time, with only 5.7 percent of loans delinquent in the third quarter of 2018.
Politicians and educational advocates trying to reduce the cost of attaining a post-secondary degree have been advocating for programs like free college. On Monday, two bills advanced in the state Senate that would assist those struggling to repay NJCLASS loans, which are state supplemental family loans for higher education.
Starting this year, Gov. Phil Murphy initiated a free community college pilot program. Students who take a certain number of credits at participating colleges can have the balance of their tuition and fees paid for after all grants and scholarships are applied.
In addition, several four-year colleges have partnered with community colleges for dual-admission agreements. Locally, Stockton University has agreements with seven community colleges, including Atlantic Cape Community College and Cumberland and Ocean county colleges.
Bob Heinrich, chief enrollment management officer at Stockton, said he wasn’t surprised by the growth of student loan debt in the state. According to Heinrich, 86 percent of students at Stockton receive financial aid, which is consistent with similar public colleges in New Jersey. He said as public institutions grow, state funding does not increase to the necessary levels and the costs are pushed off on the students through tuition increases.
“Now we have to find creative ways to help families who may not be able to pay those fees,” said Heinrich, citing the dual admission programs and work study offerings.
Heinrich said Stockton has also recently begun offering aid grants, averaging $1,000 a semester, to bridge the gap for students who qualify. For fall 2018, that was 1,758 freshmen.
“That’s really helped a large number of our students,” he said.
In addition, high school dual-credit programs allow students to come to college having already completed college-level courses at a cost of $400 per four-credit class. For students who qualify for free and reduced lunch, the fee is waived. Heinrich said 1,200 high school students will benefit this year from Stockton’s dual-credit program, up from 800 last year.
Roccato said reducing student debt should go beyond offering free college programs and the like. He said colleges need to begin to rein in the costs of higher education.
“Free tuition sounds great. Who wouldn’t want free tuition? But there’s no such thing as free tuition,” Roccato said, adding someone will pay for it somewhere along the line.
He said colleges should look at where and how they spend their money on amenities, which he said are becoming unconstrained, citing items like rock climbing walls, bamboo flooring and other high-end finishes.
“It’s going to take some tough questions around how do we do things different than we’re used to,” Roccato said.