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The Constant Increase in Student Loan Debt in the U.S.

It’s a well-known fact that student debt is high, but the average debt upon graduating may surprise many Americans. 43.3 million people have student debt. Of this, the average 2016 graduate has $37,172 dollars in loans. That’s 6% more debt than the class of 2015.

Direct Loans take up the most money. 29.9 million Americans have direct loans that total to 840.7 billion dollars. In addition, there are 3.3 million Americans using the Parent PLUS Loan. These loans total to 71.1 billion dollars.

During the recession in the late 2000’s, most debts decreased. Other household debts decreased, but student debt continued to increase steadily. Tuition prices continued to rise. This left a greater need for loans. In return, it also leads to more borrowers. In addition, the average balances of student debt began increasing as well.

In 2014, there were 89% more borrowers than there were in 2004. In these ten years, there was also a 77% increase in the average balance per borrower. One reason for these sudden increases may be because more people decided to go to college. Between 2005 and 2010, college enrollment had a 20% increase. That’s faster than any time period in the past 50 years.

Likewise, college tuition has been increasing faster than any other period in time. In 2015-2016, the average yearly tuition of a public school was $9,410 dollars. Thirty years ago, in 1986, the average yearly tuition for a 4-year public university was $2,918. This is over a 300% increase in the cost of tuition over a 30 year period.

To go along with this increase, debt has been rising too. In the last quarter of 2014, there were 32.8% of borrowers that had $50k or more of student debt. The number of borrowers now are overwhelmingly millennial aged people, or people under the age of 25.

On the up side, a slightly smaller share is beginning to take out loans. Since 2010 there has been a slight decline in loans from their upward trend from 2005 to 2010. This doesn’t put it in the clear, though. Student loans are lifelong debts for some students. For borrowers aged 20-30, the average payment for a student loan is $351 per month. The average salary for a college graduate is $45,000. This is means that $4,212 of the average $45,000 salary is being used on paying student loans.

Furthermore, 66% of graduates had loans for a public college. That 66% had debt averaging $25,550. As if that wasn’t a big price on its own, 88% of graduates from for-profit universities took out loans. This average left $39,950 towards their student debt. And this is only the numbers for undergraduate studies.

However, graduate loan debt is a problem as well. 40% of the 1.2 trillion-dollar loan was spent on financing graduate or professional degrees. Common master’s degree such as Master of Education or Master of Science will leave a debt of $50k or more (including both undergraduate and graduate school debt). Out of graduate degrees, Master of Education or Science are most sought out (34% of people go for one of the two).

On the other hand, a graduate degree could cost much more. If a profession such as a Lawyer is chosen, there is an average combined debt of $140,616. A medical school loan will total to even more money. It averages to be $161,772. This being said 4% of graduate degrees are in law, and 5% of graduate degrees are in medicine or health sciences.

Attending college is becoming more expensive and, due to that, loans are becoming more common. With tuition skyrocketing, it means loans are starting to be necessary for college to be attainable. Many students don’t have the average $9,410 per year to put towards their tuition. They’d need to save for years, so the opportunities of loans are helpful, but they’re also a money maker for the lenders – the most common lender being the government.

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