CommonBond Hosts Expert Panel on Why the Data on Student Loan Debt Doesn’t Match Up

Posted By Donna Fuscaldo on May 26, 2016 at 12:33 pm
CommonBond Hosts Expert Panel on Why the Data on Student Loan Debt Doesn’t Match Up

Yesterday, CommonBond, the New York-based student loan refinance company, hosted an event on The State of Student Loan Debt, hoping to provide more insight into the problem of student loans.

There’s no question that student loan debt is a huge problem plaguing America but just how big depends on who you talk to and what you read. With all the, sometimes even contradictory, data flying around about the level of debt, how much is in default, or how many people aren’t buying homes as a result, it makes it hard for students and parents to make a sound decision about choosing a school and whether it’s worthwhile to take on student loan debt. What’s more, student loans are the only type of debt that’s specifically geared toward young people who haven’t borrowed money before.

Debunking myths about college and student loans

“One in five people borrow money for school and use it for something else,” says Lauren Young, Money Editor at Reuters and one of the panelists. “People borrow more than they need… and that’s a problem,” she said at the event.

When it comes to the state of student loan debt there are a lot of myths that need to be debunked. Take the whole idea about the more schooling you get the more you will earn. Most people are trained to believe that if they spend more than $100,000 on a law degree, they will easily make enough to handle student debt. But it turns out possessing a master’s, Ph.D. or passing the bar doesn’t necessary equal a higher salary, says Young.

That’s not the only myth that results in people taking on extra student debt to further their post-secondary schooling or getting in over their heads when choosing a four-year school. Pauline Abernathy, vice president at The Institute for College Access & Success and another panelist, says there are is lot of misinformation about how student debt affects families and society that can impact the decision making process.

Average student loan debt up for debate

“There’s not even an agreement on the size of student loan debt,” said Abernathy. “You can’t understand the problem if we’re not measuring it and this is such a significant issue, we need to understand it much better.” Another confusing data point: the average student loan debt people graduate with. Abernathy says $37,000 is the amount of debt bandied about for graduates but for public school graduates, it’s closer to $29,000 not $37,000. That may not be a huge difference but it does illustrate the fact that debt can vary depending on the school.  “Where you go to school matters” in terms of the amount of debt so “it really pays to shop around,” she says.

According to Abernathy, parents and students need to do their homework and look at the debt level of the graduates before choosing a school. The College Scorecard, the U.S. Department of Education’s tool to evaluate schools isn’t perfect, but Abernathy says it does use some of the best data points to give people an idea of what the debt level is and what the net price for a particular school is. “It’s not just how much debt but what type of debt,” says Abernathy. “Anytime undergraduates have to take out private loans in order to enroll they should look at some other options. There’s always options that don’t require private loans.”

Borrowers can get some help when they refinance student loans – it won’t make the debt go away, but it can make it easier to handle with lower monthly payments, whether from lowering interest rates, lengthening the repayment term, or both. Extending the term – even when lowering the interest rate – can significantly increase the overall amount you’ll repay despite significantly decreasing your monthly payment. Translation: You’ll pay less per month, but because you’re making payments for a longer time, your overall payment could be greater than if you’d stuck with the original loans.

How debt affects homeownership still up for interpretation

Student loan debt doesn’t discriminate and affects both the old and young but whether or not it is preventing people from purchasing homes is another data point that is much debated. In recent months, studies have come out pointing to student loan debt as the culprit for the low level of homeownership but whether or not that’s really preventing people from purchasing homes is unclear. “Graduating with $30,000 in debt is going to have a real impact,” says Phil DeGisi, chief marketing officer at CommonBond during the presentation, noting that even with student loan debt, many people are still purchasing a home by age 30.

While the size and impact of student loan debt may vary depending on who you are talking to, one thing the panelists agree on is that parents and students are doing more research and giving more thought to where their kids go to school. It is no longer enough that it’s where they went to college. It also has to be affordable based on what their child wants to pursue. After all, the cost of a private school is going to be more expensive than a public school for an in-state resident. The same goes for private loans in many cases. Some, particularly federally backed loans are going to have protections built in while private loans do not. “Student debt could be vastly different factoring in what your major or area of study is and what school is right for you,” says DeGisi. “Whether you think it’s $29,000 or $37,000, the point is it’s just an average and it varies greatly based on the student’s experience.”

Donna Fuscaldo
Donna Fuscaldo is a freelance journalist hailing out of Long Island, New York. She has also written for,,,, Business Insider, Dow Jones Newswires and the Wall Street Journal.

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