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SALT LAKE CITY -- The class of 2011 is graduating with the distinction of being the most indebted class ever. Analysts at the National Center for Education Statistics report this year's graduates will walk away from college strapped with nearly $23,000 in debt.
Financial analysts say that number may be the highest ever; however, that's mainly due to inflation.
The amount of debt is going to be more difficult and longer to pay off (beause) the jobs market is not as robust as it was five or 10 years ago, or even three or four years ago.
–Stephen Johnson
"What the debt amount is relative to -- the average starting salaries today versus the debt and average starting salaries 10 years ago," said Stephen Johnson, branch manager of Raymond James Financial Services. "You might find out that number may not be significantly different."
The real problem isn't the debt new grads will carry but the current state of the economy.
"The amount of debt is going to be more difficult and longer to pay off as a result of the fact that the jobs market is not as robust as it was five or 10 years ago, or even three or four years ago," Johnson said.
Even if graduates are able to find work, they'll still deal with poorer economic circumstances.
"If they get jobs, they're going to have salaries on average that are lower than they were two or three years ago," explained Johnson. "And what we refer to as bonus signing in some cases, you're pretty much not going to get bonuses and benefits. It's going to be one or the other."
The National Center for Education Statistics estimates that the average starting job salary for graduates with bachelor degrees will be nearly $37,000, down from nearly $47,000 in 2009.
Income earning potential is also reliant upon the type of degree and education students pursue during those undergraduate years.
"Different types of degrees will benefit depending on the particular degree or may not help students depending on the area they graduated as well," explained Johnson.
It's never a bad idea to get a college education relative to long-term earnings.
–Stephen Johnson
Johnson also said part of the financial burden 2011 graduates are carrying is cash-strapped parents who haven't been able to help their college students pay for education or other things as they had in the recent past.
Analysts say this debt burden for 2011 graduates will affect the overall economy in that new grads will delay major milestones like leaving the nest and buying a home of their own or even getting married.
Despite the debt burden, Johnson said a college degree is still a worthwhile investment.
"College degree versus without a college degree [means] your lifetime income is substantially higher," explained Johnson. "It's never a bad idea to get a college education relative to long-term earnings."
E-mail: niyamba@ksl.com
