More than 60 percent of Massachusetts graduates had student debt last year — with an average of over $23,000 owed — and many of them are locked into high-interest private loans, according to a report released yesterday by the Massachusetts Public Interest Research Group (MassPIRG).
Students in the Bay State are graduating with an average of $5,008 in nonfederal student loans that can carry interest rates of over 18 percent, according to MassPIRG. Paying off such growing debts amid a poor job economy has left several students in dire straits.
“Students using private student loans to pay for college may as well be putting their degree on a credit card,” said Brett Kalikow, an organizer at MassPIRG.
The report comes amid a push for the creation of a Consumer Financial Protection Agency, which would provide federal oversight to the industry and curb private lenders who make loans to students with no supervision.
“When 26 percent of all private loan borrowers are not even bothering to go after the safer, lower cost loans that they can get through the federal government, something is wrong with the system,” said UMass Amherst senior Azeen Khanmalek, who considered himself the exception and not the rule for being able to secure a private loan with a somewhat reasonable interest rate.