Student debt is a reality for many people who attend college in the United States. Today, about 70 percent of students in the U.S. graduate with student loans, finishing with an average of more than $30,000 in debt. It also takes borrowers about 21 years to pay off this mound of debt.
With it being graduation season, we surveyed our users to find out how many people took out loans to pay for their college education. A total of 7,074 users responded to the survey. Among those users, 48.6 percent indicated that they took out loans while 51.4 percent said they did not. The percentage of users who took out loans is substantially lower than the national average.
However, those in tech who currently do have student debt have a lot of it. According to survey results, 18 percent of those with student debt owe $100,000 or more, which is substantially higher than the general population. According to a Pew Research survey, only 7 percent of current borrowers have at least $100,000 in outstanding debt.
We also found that among those who did graduate with student debt, 54.3 percent had already paid it off, which means that nearly 78 percent of total survey respondents currently do not have student debt.
We also looked at student debt by company. According to the survey results, Adobe has the highest percentage of employees who borrowed for college, with nearly 64 percent. Facebook has the lowest, with about 36 percent.
When we looked at the employees who were able to pay off their debt versus those who still had debt, we noticed that Facebook had the third highest percentage of employees who paid off their loans–just over 67 percent. Adobe, on the other hand, had the lowest–only 45 percent of employees paid off their student loans.
Why do less tech workers borrow for college compared to the rest of the country?
It costs more to go to college in the US than anywhere else in the world, so not surprisingly, more end up borrowing for their higher education. The tech industry relies heavily on foreign workers, many of which utilize the H-1B program. Just look at three of the biggest tech hubs in the country:
- More than half of Seattle’s software developers were born outside US
- 71 percent of tech employees in the Valley are foreign born
- 50 percent in the San Francisco-Oakland-Hayward region are foreign-born
The high percentage of foreign tech workers may be one explanation for why less than 50 percent of users said they took out loans, compared to the national average of 70 percent. Further research would be needed though since many foreign-born people do receive an American education.
Paying off the loans
The majority of users on Blind are software engineers, designers, or product managers. All of these positions come with higher pay than many jobs, allowing these employees to pay off their student debt faster than others.
According to Indeed, the national average salary for a software developer is $98,612 and over $130,000 in Silicon Valley, putting these workers in the top 10 and 5 percent of salary earners in the country.
Many working in tech also receive a large signing bonus when joining a company. In a separate survey, we asked users if they received a signing bonus from their current employer. A total of 5,212 users responded to the survey, with 67.3 percent answering that they received a signing bonus from their current employer. Among those who received a bonus, 11.4 percent received one of $100,000 or more.
Tech companies are also known to pay especially high signing bonuses for returning interns. As users point out, Facebook has been known to pay returning interns up to $100,000 in a signing bonus.
For most new graduates, a high salary and a signing bonus is not a reality. According to a new survey by consulting firm Korn Ferry, 2018 college graduates in the United States will make on average $50,390 annually. This is about half the salary for a junior software engineer, not including the signing bonus.
Tech is well-known as a high paying industry and the results from the latter survey seem to support this. When we try to understand our two survey results cohesively with broader data that reflects the nation, we get a glimpse of a pay gap that exists between tech and other job industries. Not only that, we also begin to delve into the demographics within tech and how this, in addition to compensation, may inform us why less tech workers have student debt.