More than half of A&D professionals under 30 mention student loans as a key factor in career planning. University leaders say that easily half of their students—including the top achievers—are relying on some form of loans or financial aid.

Just under 50% of the respondents to Aviation Week's Young Professionals Study—sponsored by NASA and the Aerospace Industries Association—are still paying off loans racked up while earning their degrees, and nearly one-fifth of them owe more than $80,000. David Wormley, dean of Penn State's College of Engineering, says nearly 50% of engineering students with a grade point average above 3.0 have taken loans, and the rate rises to 70% for those with lower GPAs. Leaders from Georgia Institute of Technology, Virginia Tech, Purdue University and California Polytechnic State University (Cal Poly) report similar statistics.

It is a far cry from the 1990s, when students needing tuition assistance signed up for a Pell Grant or subsidized Stafford Loan, knowing he or she could defer payment until gainfully employed and pay it off over a 20-year time span at about 3% interest. That was when the average annual tuition for a top-tier school was $25,000 and $5,000 for in-state public universities, including room and board

Today top-tier schools charge upward of $48,000—not including levies for everything from recreation facilities to lab and building fees. Average in-state tuition tops $14,000. And the interest rates? Today, plan on anywhere from 3.4%—if the student qualifies for a subsidized loan—to 7.5% or higher on the commercial market.

This may explain why young professionals want to stay in place until some of that debt is paid off. For a student graduating in 2008, whose total loan package equaled $65,000, the monthly payment schedule is close to $700. This same person, hired at $65,000 per year, has a monthly gross income of just over $5,400; that student loan payment equals about 13% of monthly income, or 5% above what the U.S. Education Department says is a “manageable debt level” for a first-year employee.

The good news is that Congress voted in June to maintain the 3.4% interest rate on subsidized Stafford Loans for undergraduates. However, students now must begin payment within six months of graduation regardless of employment status.

Top Sources Of Graduates Hired By A&D Companies
Iowa State University
University of Washington
Purdue University
Embry-Riddle Aeronautical University,
University of Iowa (tie)
Georgia Institute of Technology
Source: Aviation Week 2012 Workforce Study