As of last year, Americans owed 2.5 times more student debt than they did a decade ago. That totals out to more than $1.3 trillion. It’s basic economic numbers. More young adults are going to college at a time when it’s more expensive than ever. Hence, the student loan debt piles up.
The problem is, it has become a major epidemic. Most young people go to college with the expectation of finding a career as soon as they graduate. But, having to tackle $50,000 worth of debt right out of the gate isn’t helpful.
The Pew Research Center has a lot of staggering facts about this American crisis. Perhaps sharing these will allow you to understand what’s going on and how to prevent it from taking hold in your life. Let’s look at 5 scary facts about student loan debt.
1) 40% of Young Adults Have Student Loan Debt
Between the ages of 18 and 29, about 4 in 10 former students are struggling with this problem. The rest either had a means of paying back their loans or didn’t go to college at all. It’s a fact that student loan debt is much less common with older generations. Only 4% of people over 45 reported having student loans.
It’s true that older adults have had more time to pay off their debts, so they have less. But, there’s more to the story than that. Millennials are really the first generation to take out a loan to pay for school at this degree. Nearly half as many students got a loan in the early 1990s. Most likely college was more affordable or they had a better plan for paying it off.
2) The Amount Owed Varies by Degree
As of 2016, the average amount of student loan debt held by each student was around $17,000. It’s quite obvious that different degrees require higher amounts of loans to be taken out. A quarter of all students owe $7,000 while another quarter have $43,000 in debt. Each level of degree obtained came with higher amounts of debt.
For example, students who had an Associate degree had $10,000 or less. Bachelor’s degree holders had around $25,000 in debt on average. Postgrad degree holders had over $45,000 in debt. 7% of all borrowers owe over $100,000. They’re most likely the future doctors and lawyers of the world.
3) College Graduates are More Likely to Struggle Financially
Here’s an interesting statistic. If you have a college degree and student loan debt, you’re more likely to struggle with your finances and hold down more than one job. That’s because paying back those loans is not an easy task. Loan payments can be nearly as expensive as renting a cheap apartment.
Also: http://financialhelpers.com/trump-administration-signs-massive-student-loan-forgiveness-bill/
Due to the last decade’s Great Recession, more students were leaving college without a plan and without a job. They were more likely to live at home while holding down two or more jobs. In contrast, young adults who didn’t go to college have a better handle on their finances and don’t need to work double jobs to support themselves.
4) College Graduates More Likely to Live in a Higher Income Family
For most people, getting a college degree is a major investment that should pay off later in life. The statistics bear that out. While it is true graduates struggle more right after college, once the degrees are paid off, they’re doing pretty good. Getting a bachelor’s degree or higher, while coming with higher amounts of debt, lead to higher income families.
5) Students with Loan Debt Less Upbeat
According to the Pew Research Center, students who used loans as a way to pay for college were less likely to consider their degree worth it. It’s easy to understand those who found higher value in their degree had their education paid for by someone else. If you have to spend the next decade paying off your education, you’re more likely to think it wasn’t worth it.
Only half of students with outstanding debt say it was worth the investment, while 69% who don’t have debt say it was definitely worth it.
