Graduation 2014

Colorado is consistently ranked in the top five states for bachelor’s degrees per capita, but it comes at a cost—according to the latest figures from the United States Department of Education, college graduates in Colorado are defaulting on their student loans at a rate of 11.4%. That’s higher than the national average, and a full percentage point greater than the last round of numbers. Despite the obvious inclination to berate these youngsters for their purposeful fiscal irresponsibility, let’s back up, take a deep breath and survey the dismal conditions that students these days must face.

For one, federal student loans (which account for 80% of the total) can’t be refinanced. If you had a recent midlife crisis and bought a $100,000 sailboat, you could refinance the payments on it if (when) financial (or marital) reality sets in and you need a lower interest rate. Not so if you want to get a measly education. Plus, up until last summer, the government was giving Stafford loans at 6.8% interest, a $184 billion every ten years, so forget about that system being overhauled any time soon. (It has since lowered the rate, but students who borrowed prior to July 2013, which would be, you know, almost all of them, are not grandfathered in.)

Community Colleges have long been the smart refuge for students wary of paying for four years at costly private schools. Boulder County is especially blessed with Front Range Community College, which consistently funnels students into CU Boulder or University of Denver, thanks to credit transfer guarantees. However, community colleges across the state have also consistently produced higher rates of loan default. Ironically, expensive CU has a default rate of only 3.5%, while Lamar Community College clocks in at a whopping 25.5%.

Finally, for much of the last ten years trade schools marketed themselves to students as a practical alternative to the four-year degree. Now, the boom of for-profit vocational schools is starting to fizzle. Along with producing high rates of loan default, many offer constrictive private loans that wed students to the schools unfairly. In the first lawsuit of its kind, the Consumer Financial Protection Bureau recently went after ITT Technical schools for luring students in with zero interest loans, before hiking up the rates.

But what’s the alternative to crippling debt in a less-than-stable economy? Not going to college at all? Unless you’ve struck gold with a Silicon Valley mobile app concept straight out of high school, I wouldn’t recommend it.