Which schools have the most technical debt?
Florida Tech and the University of Miami are the most indebted institutions in the country, with the combined balance on their respective student loans at $7 billion, according to a report from the Institute for College Access & Success.
The report, released Monday, is based on data from the federal student loan servicers that show the average balance on the $1,800 in student loans for students at Florida Tech, Miami and other schools, according a press release.
The debt total at Florida State University, the University at Buffalo, the National University of Singapore, Florida State College, the College of Charleston, Florida International University and the American University of Beirut is listed at $1.3 billion.
Florida Tech was ranked No. 4 on the list, with a total outstanding balance of $1 billion.
Miami was No. 8 on the ranking, with $2.4 billion in outstanding student loan debt.
The school reported that the average monthly payment on its $6,000-a-year student loan is $11, which the school says is more than the average student loan balance in the U.S. currently stands at $5,400.
The average debt balance for all U..
S.-based colleges and universities was $25,000 last year.
The Institute for Career Advancement says that the trend has been happening for a long time.
The ICare report found that colleges are paying a higher percentage of their student loan bills on interest, rather than principal, which helps to offset the higher monthly payment.
But that doesn’t necessarily mean students are making better financial decisions, said the report’s authors, David M. Katz and Christopher E. Baughman.
“The fact that these institutions are making a higher rate of principal payments suggests that students are not making more informed decisions about what to do with their student loans, whether to refinance or not,” Katz said.
“We’re not going to see any major change in that situation.
We just need to see a larger share of the balance on student loans being paid off in the next year or two.”
The Institute’s Katz says he thinks the increasing debt burden is the result of the nation’s economy slowing down.
The federal government, however, has been paying interest on student debt at a rate higher than inflation for years.
As a result, he said, the debt burden for students has increased.
“At the end of the day, this is a pretty easy way for colleges to cover the cost of tuition and fees, but we also know that they’re going to be paying a significant portion of that interest,” Katz added.
He said it’s not uncommon for colleges and schools to use student loan deferments, in which borrowers defer paying the full amount of their loans for two years, in order to save money.
For example, for a student who borrowed $1 million in 2011, the student could defer paying $600,000 in principal on the student loan.
If the student later refinanced at the same rate and took out another loan, they could save about $700,000.