Many people borrow money — a lot of money — to go to college. The typical college student borrows nearly $30,000 to pay for a college education, and about one of every eight college graduates owes more than $50,000.
Outstanding student loan debt now exceeds $1 trillion.
Part of the reason for the expansion in student loan debt is because college has become very expensive. The average annual tuition, fees, room, and board comes close to $45,000 at private nonprofit institutions and about half that amount at public institutions. Meanwhile, median household income has remained almost flat during this time period, meaning that college costs take up a larger chunk of a family’s budget.
Student debt is now seen as a problem because the job market for college graduates isn’t strong. Recent college graduates with a bachelor’s degree or higher faced an unemployment rate of about 6 % in early 2013 compared to 4 % in 2007. The numbers are worse for young adults without a college degree! One of every five recent college graduates is working in a low-wage, non-career oriented job, such as bartender, food server and cashier.
In a recent survey conducted for the American Action Forum by Public Opinion Strategies found that 52 % of respondents said that a four-year college degree wasn’t worth the $26,000 debt burden they’d carry with them to their first job.
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