Student Loan Debt

WHAT IT IS

  • Student loan debt is the second highest consumer debt in U.S. at 1.3 trillion.
  • In 2015, 68 percent of those with an undergraduate degree had student loans. In 2003, the figure was less than half.
  • All of this makes many wonder whether student debt is the new housing bubble.

WHY IT MATTERS

College tuition is getting higher, funding for scholarships and grants are lower, and more students than ever are taking on debt. This burden will undoubtedly make an impact on the economy, as students struggle to payback their loans and manage living expenses. Many say the entire higher education system needs to be overhauled to make it more accessible without piling on debt.

  • THE DEBT-RIDDEN: “The problem is real”

    • Stop defaults:   About 3,000 Americans default on their debt every day, and the default rate for federal loans increased 17 percent last year compared to the previous year,
    • Delays real life:   About 10 percent of those who graduate with student loans say it delays life choices like buying a home.
    • Salaries are stagnant:   The average salary for college graduates increased 3 percent in the past seven years, but the cost of doubt has increased by 53 percent.
  • THE DEBT-FREE: “Concern is overblown”

    • Misplaced blame:   The majority of defaulters didn’t graduate from college, so the real problem is misplaced onto loans instead of why kids aren’t finishing college.
    • Flexible payments:   The government has options to fit each person’s budget with income-based repayment plans.
    • Long-term outlook:   People with college degree make $20,000 more a year than those without.

WHERE ARE WE NOW

THINGS TO THINK ABOUT