RICHMOND, VA (WWBT) - Commencement is this weekend for VCU and the University of Richmond. The job market for this year's college grads is a little better than last year, but defaults on student loans have spiked this year.
Many college students are piling up debt and dreading it.
Said VCU senior Ariel Good, "I've taken student loans out. I calculated that when I graduate it will be over 100,000, I think."
Added sophomore Catherine Parent, "I do know a lot of students that have suffered from tremendous student debts that are very worried about how they'll pay for their future."
Defaults on student loans spiked in the first three months of this year. The Federal Reserve Bank of New York reported that last fall 11% of student loans are in default, that's more than credit card defaults at 10.5%, and mortgage defaults at 5.9%.
There is good news. The National Association of Colleges and Employers says companies plan to hire 2.1% more new college grads than last year.
Chief economist at Chmura Economics & Analytics Christine Chmura says Richmond's unemployment is down to 5.6%, two points better than the national rate. But the job market is still tough.
"There's a lot of competition for job openings now and students coming out of school are competing with people that have had three, four, ten years of experience," explained Chmura.
She says students' success will depend on which fields they try to enter. "Students with skills in the healthcare industry will have an easier time than in the finance industry. That's still a bit slow," said Chmura.
She says engineers, accountants, and bookkeepers are in demand locally. But jobs in marketing and journalism are shrinking. That competition for jobs and student loan defaults are slowing down the economy's growth.
"When we don't see that household formation, new students buying a house or living in an apartment, then you don't have the purchase of furniture and draperies and other items that propel the economy forward," Chmura said.
Many students say they've been forced to choose majors based on their chances of finding jobs.
Said VCU sophomore Catherine Parent, "I've noticed a lot of people are going toward information systems ... where there's a lot of money to be made supposedly and I know a lot of people going over to that. Same with health services."