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Community college students dodge debt of 4-year college students

Posted May 26

An Association of Community College Trustees study showed only 17 percent of community college students take out federal loans.

This article was written for our sponsor, North Carolina Community Colleges.

The New York branch of the Federal Reserve on April 3 joined the chorus of economists saying the $1.3 trillion American student loan crisis is holding young professionals back. Those graduating with a bachelor’s degree in 2016 left with an average debt of $37,172.

The bank's report showed that as they start their careers, it is often difficult for young adults to pay these loans in addition to rent for housing, car payments, insurance and other expenses. All told, 44 million Americans have student loans needing to be repaid.

In North Carolina, student debt is lower than the United States average. While about seven in 10 students nationally take out loans, only six in 10 do in N.C. The average debt is $25,645 in the state, which is significantly lower.

Even lower still, however, is the debt of community college students. An Association of Community College Trustees study showed only 17 percent of community college students take out federal loans at all, compared to 48 percent at public four-year institutions and 60 percent at non-profit colleges.

Lower Costs

A cause of this disparity is that community colleges are significantly less expensive than private colleges and even public universities.

North Carolina's average in-state tuition in 2015-16 was $10,673 for four-year institutions. This is lower than the national average, which is around $3,000 higher, but community colleges in N.C. have an average cost of just $2,422.

Private colleges often cost 20 times that amount. Duke University in Durham, for example, has a yearly price tag of $47,650. These rising costs directly contribute to the student loan debt that is crushing many young professionals as they enter the workforce.

"At a cost of only $76 per credit hour -- the lowest tuition in the southeast -- students can take a full, 16-credit hour load for less than $1,500 per semester," explained Chreatha Alston, director of engagement services for the North Carolina Community College System. "It is very advantageous for students to complete two years at our community colleges before transferring to a university."

The Community College Path

A 2015 review by U.S. News and World Report showed that because community colleges have more students living and working off campus from more diverse stages in life, the perception is that students are less involved in campus life. However, they also found that this more diverse student body in age and experience provides students with a broader perspective.

"Our community colleges graduate over 35,000 students per year, and our student population is full of diversity," Alston said. "We serve military students, students that have been working and are seeking additional training to advance or change their careers, students who have families and need to attend part-time or students that come to us directly out of high schools. We serve students as young as 16 and as old as 70. Our community colleges are flexible and we pride ourselves in our ability to offer these options to the communities we serve."

Community colleges provide numerous professional and trade certifications as well as a two-year associate's degree. Those that get professional certifications enter the job market immediately after. The debt accumulated while paying less than $2,500 a year in tuition is significantly less than from a four-year institution.

For those that get an associate's degree, this can either be used as a stand-alone degree, or built upon towards a bachelor's degree. Those using an associate's degree in pursuit of a bachelor's arrive as juniors at four-year institutions unlikely to have taken out loans, since only 17 percent do. Their education spending is around a quarter of those who attended four-year institutions their first two years, so any loans taken will tend to be more manageable.

"Utilizing the option of attending a community college for two years and then transferring to a university can save students thousands of dollars and eliminate a lot of post-college debt burdens," Alston explained. "The savings associated with attending a community college should be an important consideration when comparing post-secondary educational options."

This article was written for our sponsor, North Carolina Community Colleges.

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