SALT LAKE CITY — Utah college students are less likely than students elsewhere to have unpaid student loans when they graduate, and indebted graduates in the state usually owe less than the national average, according to a report by the Utah System of Higher Education.
By the end of the 2013-14 school year, 52 percent of Utah college graduates had taken out student loans — about 17 percent below the national average — and incurred an average debt load of $22,418, about 21 percent less than the national average loan amount.
Utah students were also less likely to miss the payments on those loans. Between 2011 and 2013, 9.8 percent of indebted college graduates in the state defaulted on student loans, compared to 13.7 percent nationally, according to the report released last week.
Education leaders say Utah's position in relation to other states is partly because of a student culture that is reluctant to take out student loans.
"I think that Utahns reflect the conservative nature of trying to avoid debt and trying to be very responsible about the debt that is taken on," said David Buhler, commissioner of higher education.
Still, more than half of college students are unable to graduate debt-free, and few of them take advantage of all financial resources available to them.
Forty percent of students benefit from Pell Grant assistance, just 1 percent below the national average. But Utah continues to rank the lowest state in the nation in having students fill out the application for federal financial aid, known as FAFSA.
Only 34 percent of 2013's high school seniors who were eligible to receive financial assistance filled out the form, leaving $45.5 million unclaimed, according to a report released by NerdWallet early this year.
"My concern there is there are students who could use the financial help of a Pell Grant who are not getting the help," Buhler said, noting it could be because "the FAFSA is seen as kind of intimidating, or they assume they won't qualify anyway."
Some students are similarly intimidated by the prospect of borrowing money for college. But for some of them, taking out a loan could be the most efficient way to finish college, Buhler said.
"Sometimes the discussion in Utah higher education circles is perhaps students are too debt-averse," he said. "It depends on everybody's individual circumstances, but sometimes it can make more sense, even economically, … to go full time, take out a loan and get done."
Utah Valley University in 2013 had the lowest average loan amount out of Utah's four-year institutions at $14,601, though 57 percent of its graduates take on debt, according to CollegeInSight, a national research and advocacy organization.
Linda Makin, UVU's vice president for planning, budget and human resources, said the university is starting a new student financial services initiative to help students decide which financial options to use and provide tutoring on how best to manage the aid they receive.
"We are really concerned about student debt, but we're also concerned about students who get within a semester or two and, rather than take out a small student loan, don't graduate," Makin said. "I think some of that is just the way we need to communicate with students. … We're looking at ways and those trigger points to help them be more successful."
Dixie State University has second-lowest tuition rates of Utah's public four-year institutions and the highest percentage of Pell recipients, but it also had the highest average debt load in 2013 at $23,009 per graduate, according to CollegeInSight. Like UVU, 57 percent of Dixie's graduates that year were in debt.
J.D. Robertson, executive director of financial aid and scholarships at Dixie, said a higher cost of living in St. George, not all of which involves housing, can contribute to a higher rate of student debt.
"We do pay more for our cost of living here," Robertson said.
Robertson said Dixie is also a popular institution for transfer students. About 30 percent of the university's students previously attended another institution, and some take out student loans before they even get to St. George.
"They've gone to another school, it didn't work out for whatever reason, and they find themselves at Dixie," he said.
But nine in 10 Utah students who do take out loans are able to manage them successfully. In some places, that number is even higher.
At Brigham Young University in 2011, less than 2 percent of students who were in debt defaulted on their loans, and only 30 percent of students who graduated in 2013 had unpaid college debt. University spokesman Todd Hollingshead said the low rate of student debt is partly thanks to the fact that almost half of BYU's 30,000 students are employed on campus.
"That's a pretty good chunk," Hollingshead said. "That's certainly something that helps them to manage their student costs."
Effective student orientation programs also help educate students about the opportunities and responsibilities that come with financial aid, he said.
"I think that any university is similar in this sense that they try to educate at the front end," he said. "We try to provide that information to the students right up front, and I think that helps them to plan for the years of their education."
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