Average student debt decreases for second year at ISU

Average student debt load upon graduation fell slightly at Iowa State University last year, and it increased at the University of Iowa and the University of Northern Iowa.

It was the second year in a row average student indebtedness decreased at ISU. That pleases officials, since ISU has the highest average student debt of Iowa's three regent universities.

“We're not where we'd like to be on debt levels at all three,” state Board of Regents President David Miles said. “But the most important one to go down is Iowa State, since it's well higher.”

The regents, at a meeting next week in Ames, will hear two reports on student financial aid, with information about student debt student socioeconomic status.

For students who graduated with student loan debt in 2009-2010, the average was $29,475 at ISU, down slightly from $29,767 the previous year. At the UI, average student loan debt in 2010 was $25,515, up from $24,466. At UNI, average debt last year was $25,735, up from $24,123.

The average need-based indebtedness upon graduation was much lower - $13,182 at ISU, $12,981 at UNI and $11,414 at the UI. Need-based loans are awarded to students whose families show financial need.

Several federal grant programs have helped provide need-based aid to ISU students in recent years, though some of those federal programs are due to sunset, which is a concern, Roberta Johnson, director of ISU financial aid, said.

“There's going to be a decline in terms of the dollars that will be available from federal sources to help us mitigate the debt our students might be incurring,” she said.

All three universities are investing more tuition revenue dollars back into need-based financial aid, Johnson said. There's also a big push for more counseling and education of students throughout their college career about money, borrowing and debt, she said.

“They are flocking to those classes,” Johnson said.

The percent of undergraduates who received financial aid last year was 86 percent at UNI, 85 percent at ISU and 75 percent at the UI. The percent of undergraduates who graduated with student debt in 2010 was 77 percent at UNI, 70 percent at ISU and 60 percent at the UI.

The number of students who received federal financial aid in 2009-10 at the three universities increased by 2.4 percent from the prior year.

The three universities also had 1,997 students - 8.4 percent of the number of students who filed for federal financial aid - with an expected family contribution of zero toward their college education. That's an increase of 66 percent from the year before, when 793 students had an expected family contribution of zero.

Miles said such figures show it's important for the state to continue working on sources of need-based aid.

“Looking at the demographics of students likely coming our way in the future, it's more first-time students … more students from low-income families,” Miles said. “We are going to need to find ways to provide more funding.”