Student loan debt in the United States is now over $1 trillion according to the Consumer Financial Protection Bureau. Graduating college seniors in 2010 had an average of $25,250 in student loan debt according to The Project on Student Debt. How in the heck did that happen?
Like this. Since 1980, when my parents graduated high school, the cost of college has more than doubled in constant dollars while annual wages in constant dollars for those 25 to 44 (most student loans are repaid over a 20-year time frame) have remained virtually the same.
It’s getting more and more difficult to pay for the same education.
Rising cost of tuition, fees, room, and board (constant dollars):
Stagnant annual income for full-time workers age 25-44 (constant dollars):
During my college years, my parents didn’t have the funds to help pay for school, so I utilized all the federal grants I could, received a scholarship from a local organization in my hometown, worked 25 hours a week, and went to community college for two years then transferred to a state school to save money. I still had to take out $8,500 in federal student loans. I’ve been paying the minimum $96.46 per month (all I can afford) since December 2008 and still have $6,219.89 or 0.0000006219% of the total outstanding student loan debt in the U.S. to go.
[Update] I share that to illustrate that even with doing all the cost-effective things, college is still unaffordable to a lot of people. I think it’s high time we take a long hard look at why 66.5% of all 4-year college students have to borrow money to pay for school (according to finaid.org) and college costs are rising at much more drastic levels than wages. Something in the system is broken, and we need to fix it.