Student Debt Reaches All-Time High
“Student loans outstanding will exceed $1 trillion this year,” an article just published in USA Today, reports that student debt in America has reached an all-time high.
Here are some statistics that the article cites . . .
- Total outstanding student loans will exceed $1 trillion for the first time this year.
- Last year students borrowed more than $100 billion. That’s another first.
- Undergraduate students borrowed $4,963 in 2010 on average. That’s up 63% from 2010 after adjusting for inflation.
- Americans now owe more on student loans than they do on credit cards.
- Students are now borrowing twice as much as they did 10 years ago, after adjusting for inflation.
- Students are defaulting on loans in record numbers. The portion of borrowers who were more than nine months behind on payments was 6.7% in 2007. That rose to 8.8% in 2009 (the latest data available).
Dire effects . . .
If you’re a student who is sinking in debt, we don’t have to explain what the effect has been on your life. Chances are you have moved back home with your parents. If you have a job at all, a huge percentage of your earnings is probably earmarked for repaying your loans.
Debt is causing more widespread economic damage too. Students who owe large sums often will delay buying homes, buying cars, and even getting married. This will exert a downward force on the economy and slow its recovery.
The only solution is to cut the cost of college, of course. We can wait for less expensive educational options to arrive, or take advantage of those that are already available. Or we can wait until the government takes action to reduce the cost of American education – something that is unlikely to happen in the current cost-cutting climate in Washington.
And once again, students are caught in the middle of a strange drama where the cast is made up of schools with immense tuition costs, lenders that charge too much for loans, and a government that is either unwilling or unable to help.