It would appear as if nothing grew faster in the United States over the past decade more than student debt. In fact, over the last decade, the cost of going to a university has exploded three times faster than any other expense. Currently, the amount of student debt on the books is $1.53 trillion and climbing. It doesn’t appear to be going anywhere soon.
The goal to go to college and get a degree is a noble one. We do it hoping it will lead to a wonderful, life-long career. We think that career is worth it, so we take out a loan to pay for housing, books, and tuition. We wholeheartedly believe we’ll be able to pay back that student debt, so we sign on the dotted line.
Once the student graduates, an entirely different scenario plays out. Repaying student debt becomes a massive hurdle for most. The job situation they expected to pan out doesn’t go anywhere. The money they thought they’d have left them feeling empty. They graduate and immediately find themselves slapped with a massive bill and huge monthly payments.
In a lot of cases, it can take 10-20 years for someone to fully pay off their student debt. If the economy is bad, forget it! If jobs are lacking, don’t even bother. And if someone goes into default for not being able to pay, their luck has run out. Interest continues to pile up and many can’t seem to get ahead of it.
Student Debt Statistics
The amount of debt Americans hold is staggering. There are other statistics you should know about this growing crisis.
• 44.7 million Americans hold student debt. That’s about 1-in-4 people.
• The average amount of debt each student has is: $37,172
• The average monthly payment: $393
• In the last decade, student debt has surpassed credit card and auto loan debt
• Since 1971, the cost of going to a public university has grown from $8,730 to $21,370
• Since 2971, the cost of going to a private university has grown from $18,140 to $48,510
The state with the fastest growing amount of student debt is South Carolina. Over the last decade, their debt quadrupled, increasing from $5.6 billion to $23.1 billion. Still, the amount of student debt held grew in all 50 states and DC. The only type of debt that still surpasses it is mortgage debt. The problem is, you can’t discharge it with bankruptcy.
The problem is so bad that 41% of student debt borrowers can’t even afford $400 for an emergency! They’re cash-strapped, not saving for retirement, and unable to make life decisions. It’s forcing them to delay marriage, put off having kids, from buying a home, and more. These numbers show no signs of getting better.
The big question will be how all of this debt will affect the economy long-term. If people can’t afford the basics and aren’t saving money, it doesn’t bode well. Hopefully, a solution is in the works sometime soon. If not, millions of American families will be upside down financially.