Congratulations! Here Is Your Diploma and $27,000 in Student Loan Debt
May 14, 2015
This month, as 1.8 million newly minted bachelor's degrees are handed out, most graduates will be coming off the stage with much more than a fancy piece of paper. Seventy percent will take an average of $27,000 in student loan debt with them as they try to build their careers after college.
- Almost 40 million people have student loan debt, which is the only category of household debt that continued to rise during the recession, and fifteen percent of borrowers default within the first three years.
- The 90-day delinquency rate on student loan debt is 11 percent. This is higher than the delinquency rate for residential real estate loans (3 percent) and the credit card delinquency rate (7 percent).
- Since 2004, overall student loan debt increased by 325 percent, while all other categories of non-housing debt decreased by 5 percent. Over that time, the number of borrowers owing between $50,000 and $75,000 has doubled, and the number of borrowers owing more than $200,000 has tripled.
Until the underlying reason for increases in college tuition is addressed, student loan burdens will only continue to grow. In a time of high under- and unemployment among college graduates, artificially increasing the costs of college though the current system of federal student aid programs leaves many graduates hopeless and suffocating under heavy debt.
Source: Diana Furgchtgott-Roth and Jared Meyer, "College Grads are Drowning in Student Debt," Economics 21, May 13, 2015.
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