1. Student Debt
Goal: By 2030, undergraduate student loan debt will not exceed 60 percent of first-year wage for graduates of Texas public institutions.
A maintenance goal is proposed for student debt. Undergraduate student loan debt compared to first-year wage has been relatively stable over time.
Although this ratio has remained stable, it is important for the Texas economy that it remain so.

2. How Much of My Monthly Income Should Go to My Student Loans?
Nationwide student debt has risen to alarming levels.
Shocking stats on student financial literacy—and why they matter
Forbes: Backlash: Student Loan Burden Prevents Borrowers From Buying Homes, Cars
How Much of My Monthly Income Should Go to My Student Loans?
Half Of Federal Student Loan Borrowers Not Paying On Time
Nationally, student debt has risen to alarming levels, but Texas is the nation’s ninth lowest state for student debt. Still, Texas student debt has risen 8 to 9 percent each year since 2011 and exceeded $70 billion in 2013.
The number of Texas students taking out loans has increased 6 to 14 percentage points depending on the degree level.
Estimated tuition and mandatory fees for full time students are 2.5 times 2000 levels.
Additional time and credit hours lead to increased costs for the student and the state; influencing student debt levels. Understanding not all degrees require four years to complete, at four-year institutions full time students are taking 20 percent more time for a four-year degree and attending 20 percent more hours.
At two-year colleges, full time students are taking twice the expected time and attempting 60 percent more hours to complete.
Comparing Colleges' Net Prices Is Tricky, in More Ways Than One
Student debt may hurt housing recovery by hampering first-time buyers
Study: Texas 9th best for student debt

3. Be Financially Informed
Three interrelated factors are key determinants of college affordability and student loan debt.
State
Fund Wisely
Student
Be Financially Informed
College or University
Be Efficient
Formula Funding
State Grants
These three factors influence college affordability – students, the state, and institutions.
Students’ decisions about their time and finances during and after college affect affordability.
Colleges and universities can strive to reduce expenses while maintaining quality and ensure students are informed about the financial implications of their academic and career choices.
The state can optimize grant and per-student funding.
Time-to-Degree

4. Monthly loan payments can take a substantial portion of a first-year wage.
Depending on the degree and major, a graduate’s loans can be as high as one-third more than the first-year wage. This is less for higher wage majors like engineering and programs that students complete in less time.
Loan repayments can take 7 to 20 percent of a students’ first-year wage.
The average Texas student leaves school with $27,000 in loans and earns $31,000 in the first-year.
While engineering majors fare better, psychology majors spend one-fifth of their first year wages on loan repayments.

5. Student debt delays graduates from achieving savings goals.
Out of the many savings priorities people have, this example focuses on saving $20,000 for the down payment on a home.
A high school graduate would make the payment in 19 years by saving 15 percent of an $11,000 wage.
A debt-free college graduate would save this in two working years.
A college graduate with debt would save this in eight working years.
Laurie – in case someone asks, this assumes all three students would have the same living expenses, and all excess funds would go into savings for the house.