Since the start of the Great Recession, household incomes have failed to keep pace with the rising cost of attending college and associated living expenses, including rent, transportation and utilities. Tuition increases, which have been in response to steep State budget cuts to higher education, have outpaced inflation and increases in financial aid. The result: students are relying more heavily on student loans, including private loans with higher interest rates.
During the 2007-08 school year to 2009-10 school year, in-state tuition at a public four-year college in North Carolina increased approximately 5 percent. Yet, the average debt for graduating seniors who attend a public four-year college in North Carolina increased 20.5 percent during this time period (see the chart below). Recent UNC System-approved tuition hikes will likely translate into an uptick in students’ reliance on borrowed money.
Financial constraints may lead some low- and moderate-income students to work long hours while earning a degree. A 2009 study found that the optimal study-work balance for a full-time student is part-time employment of less than 15 hours per week. Working more than 15 hours per week puts a full-time student at risk of dropping out.