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Media Contact:
Kristina Tirloni
TG
(512) 219-4990
(800) 252-9743, ext. 4990
kristina.tirloni@tgslc.org

August 7, 2012

Study focuses on students' academic and career choices to determine student loan repayment success

Round Rock, TX — One million dollars is the oft-cited figure representing the difference in lifetime earnings between a person with a bachelor's degree and one with a high school diploma. However, a new study from TG challenges the usefulness of that one million dollar figure by demonstrating that the financial benefit of a bachelor's degree is heavily dependent on the academic major and profession that a student selects, with nearly no increased earnings in some occupations and very large boosts in others.

In "Balancing Passion and Practicality: The Role of Debt and Major on Students' Financial Outcomes," data collected from the U.S. Census Bureau and the National Center for Education Statistics (NCES) provide a first-time glance at debt-to-income ratios for the most popular majors in the U.S. and Texas. With national economic and unemployment numbers fluctuating, "Balancing Passion and Practicality" underscores the importance of responsible borrowing and the careful selection of major in order to pursue a career passion without sacrificing practical needs.

"When students choose their college major, it usually corresponds to a career they have their heart set on," explains Jeff Webster, Assistant Vice President of Research and Analytical Services at TG. "Our report puts a spotlight on the importance of teaching how federal student loans may take a significant bite out of potential future earnings, and students should balance that occupational choice with wise borrowing behavior."

Key findings of the report include:

Differences in debt-to-income ratios are driven primarily by the amount earned early in students' careers, when they are beginning to repay their student loans.
Earnings vary by choice of major and occupation; armed with the correct data, students can plan and borrow accordingly.
On-time graduation can lower college costs and make debt burdens more bearable.
Access to labor market information and expected borrowing levels is critical when deciding whether to pursue an advanced degree.

The report also suggests strategies for encouraging manageable debt-to-income ratios. Following the practices of three Texas institutions and three non-Texas institutions, researchers outline how the institutions engage in activities that promote responsible borrowing and career planning.

"A key solution to helping students succeed in loan repayment is integrating student loan counseling, academic advising, and career guidance," explained Webster. "Schools should coordinate messages about choice of major, amount borrowed, and career pursuits in order to safeguard students' ability to repay loans after graduation."

To read the report in full, visit www.TG.org/research.

TG is a public, nonprofit corporation that helps create access to higher education for millions of families and students through its role as an administrator of the Federal Family Education Loan Program (FFELP). Its vision is to be the premier provider of information, financing, and assistance to help all families and students realize their educational and career dreams.

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