Loan Debt Could Affect Career Choices.

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Author: Rainry, Amy

At a time when the government estimates that two million new teachers will be needed in the next decade, the large student-loan debt that college graduates face may deter students from entering public-service careers like teaching and social work, according to a report released last week by the State Public Interest Research Groups' Higher Education Project.

The report, "Paying Back, Not Giving Back: Student Debt's Negative Impact on Public-Service Career Opportunities," identifies the percentage of recent college graduates who would face unmanageable student-loan payments if they become a teacher or a social worker.

Twenty-three percent of all four-year public-college graduates and 38 percent of private-college graduates would have too much debt to manage as a starting teacher, according to the report. As starting social workers, 37 percent of public-college and 55 percent of private-college graduates would have burdensome debt.

The unmanageable debt for graduates who go into teaching and social work is representative of the situation for people who enter other public-service fields, said the report's author, Luke Swarthout, a higher-education associate for the State PIRG's.

To calculate the figures in the report, State PIRG researchers used a formula developed by two economists that defines debt as unmanageable when loan payments would have a measurable and burdensome impact on graduates' lives and make it difficult to pay for core living expenses. The calculations are based on a fixed interest rate of 6.8 percent, the rate scheduled to take effect in July for federal student loans.

The report suggests four steps the federal government could take to ease debt loads. It calls on the government to increase need-based grant aid, make repayment terms on federal student loans fair and affordable, promote consumer protections for borrowers who turn to private loans, and establish incentives for colleges to control tuition costs.

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By Amy Rainry