💡 Get Philly smart 💡
with BP’s free daily newsletter

Read the news of the day in less than 10 minutes — not that we’re counting.

Man, those student loans.

Struggling with them? You’re not alone. If you received or are working on your degree from a Pennsylvania university, you’ll probably owe more than your friends who attend college in another state. According to the Project On Student Debt, 71 percent of Pennsylvania college students graduate with debt, and their average debt is $32,528. Pennsylvania has the third highest total in each of those categories.

But not all universities are equal. Billy Penn examined how much debt area universities (plus Penn State) are saddling students with; we also consulted Christina Santos, the director of College Retention and Success at Philadelphia Futures, to get tips on how to avoid being the graduate who gets handed a $30,000 bill with your diploma.

After all, the Pennsylvania average is more than a student should owe. Santos says she wouldn’t recommend taking out loans of greater than $25,000 for most students and ideally no more than $10,000 (Philadelphia Futures is a nonprofit that works with low income students to set them up for success in college).

Philadelphia schools in particular present a challenge. Santos says it’s great that the city and surrounding area provide so many higher education opportunities but unfortunately most of the schools lack huge endowments and are more reliant on tuition to earn money. That’s not good for students trying to avoid debt. It also means they need to be super aware of expenses when they consider the schools they want to attend.

“Students need to think about what repayment looks like,” Santos says, “before they borrow.”

Cost and debt

The college with the highest sticker price won’t always leave you with the most debt. Students at public schools Penn State and Temple graduate with an average of $35,430 and $34,382, respectively, according to the Project On Student Debt. The average student at Bryn Mawr, Swarthmore, Haverford and Penn leave with under $20,000 in debt.

Though the debt for many of these private schools is lower, keep in mind that their overall cost is still higher. A Penn State student who graduates with the average amount of $35,430 of debt, still paid a total cost of attendance (about $100,000) less than half as high as a Penn student (over $200,000), who graduates with an average of $19,798 of debt.

The debt numbers come from the Project On Student Debt, and the cost estimate comes from U.S. News and World Report or individual schools’ websites. Drexel and St. Joseph’s aren’t included here. Their data for debt wasn’t available at Project Student Debt or available on their websites.

How well do universities respond to students’ financial needs?

You might be thinking that Penn, Swarthmore, Bryn Mawr and Haverford have a lower percentage of students with debt and lower debts because they educate a wealthier, more select clientele. That’s likely the case in many situations. Public schools will almost always have more students dependent on financial aid, resulting in graduates with higher debt and a pool of financial aid that will have to be spread among a larger population. But another metric, average percentage of financial aid met, illustrates a strength of these private schools.

Out of 1,137 schools that provided financial aid data to U.S. News and World Report, 62 met the required needs of 100 percent of the student body. That means in-need students at these schools got the amount necessary to cover the gap between cost of attendance and what the family can afford through loans, scholarships or grants. Penn, Swarthmore, Haverford and Bryn Mawr all met 100 percent need. No surprise then that Penn was ranked the country’s No. 10 Best Value University by U.S. News and World Report, and Haverford and Swarthmore ranked among the top 25 in that category for liberal arts colleges. Those three schools are also unlike the others in that they don’t offer university aid packages including loans. If you get direct financial aid from Haverford, Swarthmore and Penn, you won’t have to pay any of it back. 

Percentage of students who receive financial aid is another important metric. At these 12 schools, at least 45 percent of the full-time undergraduate student body is receiving some type of need-based financial aid, according to data from U.S. News and World Report.

Taking cost, debt and these other two measurements into account, Cabrini College appears to be one of the worst area colleges for expense. It costs $41,000 a year, and 90 percent of its graduates have debt. Though nearly 80 percent of Cabrini’s students receive financial aid, only 55 percent of those students have their needs met.

(Again, no Drexel numbers here, but St. Joe’s is included).

Which universities are the most generous?

Universities with large endowments and smaller student bodies are bound to be more generous when giving financial aid, right? That’s definitely the case with Penn, Bryn Mawr, Swarthmore and Haverford, which have massive endowments. Do any of these 12 schools punch above their weight, though? Do they meet a level of financial aid at a higher rate than expected given their endowment? To find out, we took each school’s endowment (either from U.S. News and World Report or the respective university) then divided it by the undergraduate student body to create an endowment level per student ranking. Then we ranked each school based on their percentage of financial aid need met, as seen above.

For the most part, endowment ranking and percentage of financial aid need met ranking line up. But Philadelphia University and La Salle give out more aid than expected. Phila U ranks 11th in endowment per student but eighth in percentage of financial aid need met. La Salle ranks 9th and seventh, respectively.

Opposite Philadelphia University, Penn State and Cabrini meet financial needs of students at a lower rate than would be expected relative to the other schools. Cabrini ranks eighth of the 12 schools for level of endowment per student but 10th in percentage of financial needs met. Penn State ranks seventh at endowment per student (and that’s dividing its endowment by the entirety of undergraduates in its statewide system) and 11th in percentage of financial needs met.

What to remember when taking or repaying loans

Here are a few key points of advice from Santos when it comes to taking on and repaying loans.

  • As mentioned above, probably don’t take out more than $25,000 in loans and ideally keep to $10,000 or less. The limit for federal loans is $38,000.
  • Federal direct loans should always be the first option for loans because of their favorable interest rates and contingency plans if a student struggles with repayment. And if you’re eligible, make it a subsidized federal direct loan — those loans don’t accrue interest while you’re in college.
  • Parent PLUS loans should be taken with caution, particularly for low-income parents. Santos warns that while college is generally a good investment for students, the parents of those students won’t see a jump in income because of their kids.
  • If you’re thinking about grad school, probably choose a less-expensive option for undergrad. “If a student plans on graduate school or a law or medical degree, help them understand that taking out $50,000 as an undergraduate is going to set them up in a way that they can’t purse their dreams,” Santos says. “So, choose a degree path where the debt might be more reasonable. Maybe it’s not your dream school, but you can graduate with $15,000 or $20,000 in loans. If you’re going to have to borrow to get your MBA anyway, make that your dream and that’s where you take loans.”
  • Figure out which type of loan repayment system to follow based on your employment status after graduation. Young people with steady, well-paying jobs should sign up for the 10-year standard repayment plan (or pay off even more if possible), so the least amount of interest will accrue. Those with lower-paying or less steady jobs should consider signing up for an income-based-repayment plan that would feature a lower monthly payment.

Mark Dent is a reporter/curator at BillyPenn. He previously worked for the Pittsburgh Post-Gazette, where he covered the Jerry Sandusky scandal, Penn State football and the Penn State administration. His...