Growing number of college grads owe $100,000 or more for student loans

The USA Today reports:

The average college senior graduated this year with more than $19,000 in debt. That's a problem Joe Palazzolo would love to have.

Palazzolo, 25, graduated on Mother's Day from Rutgers University with a master's degree in public policy and student loans exceeding $116,000. His payments will average about $800 a month. It could have been worse: Because of his top grades, Rutgers paid Palazzolo's tuition for his final year of graduate school.

At a time when his friends are thinking about buying their first homes, he's looking for roommates to share a three-bedroom house so he can limit his rent to $600 a month. “I feel like I've done everything I was supposed to do, and at the end of the day, I've got this huge debt,” Palazzolo says. “What did I do wrong?”

After years of rising college costs and shrinking financial aid, it's come to this: Some graduates are now leaving college with student-loan debt in the six figures.

Graduates with more than $100,000 in debt still account for a small subset of borrowers. But their numbers are rising. And the proportion who are leaving college with some level of unmanageable debt — debt they can't repay without significant hardship — is swelling.

In 2004, nearly 8% of graduating seniors carried student loans of $40,000 or more, according to the Project on Student Debt, a non-profit advocacy group. In 1993, even adjusted for inflation, only 1.3% of college seniors had debt that large, says Robert Shireman, director of the project.

About 11% of graduates of private, non-profit colleges have loans of $40,000 or more vs. 5.5% for public colleges and universities, Shireman says.

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