In the United States over the past few decades, student debt has increased in terms of the number of people with student loans and the average balance of those loans. In 2011, about two-thirds of college students had student loan debt, compared with less than 45% in 1993. The average amount borrowed increased from the equivalent of $14,500 US Dollars (USD) in 1993 to $26,600 USD in 2011. This is thought to be because college tuition and fees increased in the previous few decades at a rate that was four times the increase in the consumer price index, which is based on retail prices of goods and services.
More about student loan debt:
- The total amount of outstanding student loan debt in the US reached more than $1 trillion USD in May 2013, making student loan debt higher than credit card or automobile debt in the US.
- In 2013, more than 12% of people with student loans defaulted on their loans, compared with a default rate of less than 6% in 1999.
- It is estimated that almost 30% of people who take out student loans drop out of college before completing their degrees.
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More Info: consumerfinance.gov
Discussion Comments
I find it very shocking and alarming when it says that many students who borrow student loans drop out of college before even finishing it. However, who can blame them? I've already completed my degree(s) at college, but even then, it wasn't easy for me.
Years ago, college was a place that anyone could go to. Yes, it cost money, but it wasn't "closed off", per se. However, in this day and age, that's all changed. Eventually, it will become a place that only the rich can afford, an institution that shuts off those seeking to further their education. It's a shame, really.
In my opinion, the main reason why student debt has increased so much is due to how expensive colleges have become, which the article even states.
In fact, think of it this way - student loans are borrowed in order to pay for college expenses, right? Well, with university fees increasing, more and more loans are being borrowed in order to compensate. Eventually, it comes back to bite students, and they have to pay up to thirty thousand dollars after graduation. Eventually if it's not paid off, it leads to bad credit, and an endless sea of debt.
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