With more than 37 million people (over 10% of Americans) in the country utilizing student loans to pay for education, and many falling behind in repayment, the future of this industry is in question. The amount of student load debt accrued by America’s college students now totals almost 1 trillion dollars, or 1/17th of the US national debt. To put this in perspective, that is almost 13 times the total wealth of Bill Gates, the richest man on earth.
The highest number of borrowers is found, not surprisingly, among those who have recently graduated from college. There are 14 million people 30 years old and younger who are struggling to pay off student loans. The 31-39 year old age group accounts for 10.6 million borrowers. People over the age of 30 accounted for 76% of total student loan debt. For an increasing number of students pursuing higher education, accruing debt is inevitable.
In 1993, 45% of college students and their families went into debt to pay for a student’s bachelor’s degree. By 2012, roughly 2/3 of students were borrowing money to pursue their bachelor’s and that statistic does not take into account families borrowing money to help students finance their education.
The average amount of student loans owed by a student in 2012 was 29,400 dollars. And the most student loan debt, over 50%, was accrued by families making less than 8,500 dollars a year. These families and students have no way of paying off money they have borrowed.
Despite this, we still see a trend of student loan debt increasing at an average rate of 6% per year. The tuition at public 4 year universities has increased at an average of 4.3% every year for the past ten years. If the money we are being charged for college continues to increase, and jobs continue to require college educations without paying wages to cover debts, then the financial hole of student loan debt will only continue to get deeper.
To learn more about student loan trends, contact Brock and Stout Law today.