The New Toll of American Student Debt in 3 Charts

The average debt load is flattening out, a new analysis of federal loan data shows, but college isn’t getting cheaper. Many students are hitting their borrowing cap, and parents are filling the gap.

Comments: 48

  1. Once again, average debt is the issue. Some 30% of students graduate with no debt (and are not included in the calculation of average debt in most cases). If you look at the breakdown of actual indebted students, some 60% owe $10,000 or less. It is the ever increasing number of students graduating with a lot of debt that pull up the average. The percentage of students graduating with more than 50k of debt has more than tripled since 2000 and are responsible for more than 55% of all the student loan debt in the US.

  2. The fact that this "average" is not an average over all students (or all graduates) is a key point, and I have written to the Times in the past to point this out when their stories indicated that the roughly $30K "average" debt was an average over all students, or all students who graduated from 4-year colleges. (Of course, I've never gotten a response.) It's disturbing to see it happen again, and to have a graph that's so poorly labeled and described so that the reader is misled about what the averages really are. Moreover (at least a year or so ago when I last checked the figures and wrote to the Times asking them to correct a misleading story on student debt), the figures for students who graduate from public or nonprofit colleges and universitites is substantially lower, about $20K per debtor. So a huge part of the figure trumpeted in this article comes from students attending for-profit colleges, which, as is well known, present a lot of other problems as well. The student debt problem is serious enough without the Times fudging the statistics to make a more sensational article.

  3. Institutions of higher-ed declared themselves to be "businesses" about 3 decades ago, in order to justify exorbitant salaries and benefits for ever-increasing numbers of executives, "administrators", and tenured (not part-time) faculty. State universities, once run efficiently by "public servants" receiving very modest salaries, became profit centers, and tuition skyrocketed based on the business model of loans. State legislatures are responsible since they authorize taxpayer-funded salaries, benefits, and infrastructure expansion. At this point, the best solution is to offer the first 2 years of college on-line for "free". There is no difference between viewing a computer presentation in a classroom or at home.

  4. "State universities ... tuition skyrocketed based on the business model of loans."

    This is false. Tuition at state universities has increased as a direct result of reduced support by state governments. The basic issue is, should states subsidize higher ed, as they do elementary and secondary ed, or force it to be self-supporing?

  5. There is a huge difference between viewing a computer presentation and having a live human being doing the teaching. A live human being can respond to questions, change tactics if needed, and provide feedback. Presentations of any sort, computer or not, are useless if all they do is ramble on, are confusing, or worse, don't address the topic at hand. I've taken courses online that were wonderful but didn't allow for questions or, worse, taking notes or copying. There's nothing like a real person who is excellent at the job doing the teaching. And they deserve to be paid better than the curriculum director, the deans, or the chancellors.

  6. If businesses have decided that every job they offer requires 16 years of schooling instead of 12 perhaps the country should provide an additional 4 years of public education. Or the country's school systems could begin to do a better job educating the non-college students in grades K-12 and offer apprenticeships once the students are in 9th grade. Our current system is not serving students of any level well. Students should be able to graduate from high school with the skills they need to find a decent job. College should not be a requirement.

    College students should not have to graduate with debt that will force them to take jobs in the private sector, live on very little for decades, or threaten their ability to support themselves and a family as they get older. It's a real shame that so much of what passes for education in America, even in the Ivies, doesn't translate into a decent job no matter what the major is. I know because I graduated with a major in biology and minor in chemistry in 1980. I had to change careers in 1997 and start over. Now, at the age of nearly 60 my college degree means nothing.

    What this is all about is pay and jobs. Pay us, hire us, treat us like human beings instead of cost units.

  7. "College students should not have to graduate with debt...." reminds me of a song. "Lord, won't you buy me a Mercedes Benz. My friends all drive Porsches..." Where should the money come from to pay for college? How would we determine the fair way to provide diplomas from Ivies to some students and from State schools to others?

  8. Re RC MN1h ago, who writes

    ...exorbitant salaries and benefits for ..ever-increasing and tenured (not part-time) faculty.

    Glassdoor Data

    Assistant Professor Tenure Track

    "Mar 15, 2018 - The national average salary for a Assistant Professor, Tenure Track is $67,666 in United States. Salary estimates are based on 374 salaries submitted anonymously to Glassdoor by Assistant Professor"

    Administrator Data from Glassdoor

    Research Administrator $62, 959

    Department Administrator $ 54,102

    Grants and Contract Administrators $ 62,154

  9. Did you know that data is not verified on Glassdoor? I can go on to the site and put whatever information I want. Their data is not good data.

  10. Change the law so that student loan debt can be discharged in bankruptcy and the whole problem disappears and college will also become a lot more affordable.

  11. The political implications of this shift are YUGE but the author doesn't even hint in that direction, not even a cursory link to the Times' recent piece on the AARP's newfound interest in student loans!

    This reader is now hungry for any sort of analysis on how this shift might impact future efforts at federal debt relief legislation. Maybe the Economist will have something to chew on...

  12. Our society and a sane government would encourage and help to jump start apprenticeship programs where students come out into the world work mechanical and technical skills and less of vague general degrees which are only used as stepping stones for further education and more debt.
    All of this can only happen with strong labor unions, guaranteed basic incomes, and universal healthcare so that people are willing to start taking risks.

    The other option would be stronger regulations regarding tuition hikes on academic institutions which is not feasible. Making more jobs available in undeserved/rural areas while allowing participation in public loan forgiveness would further improve and make debt more manageable

  13. I owe more than $200,000 in student loans for my master's degree, work on a Ph.D. that I never will finish because I can't afford to, and for my older daughter's bachelor's degree. In a year, my younger daughter heads to college. It makes me sick to think what that is going to add to the total. Every calculator we've seen so for shows that we will have to pay $20,000 a year for school for her. That is more than HALF of my take-home pay. Her dad has passed away, so that means I am it. How insane is this?

  14. You’ll know that the bubble is bursting when well off kids and their parents who theoretically can pay the bill at elite private institutions consider the value proposition and instead choose colleges that are 10 to 50K cheaper per year. Money is money. Just because you don’t have to go into debt to pay for something doesn’t mean it is worth the price. University of Wisconsin, University of Minnesota, Georgia Tech, Virginia Tech, University of Florida, UT Austin, Binghamton, (add your state’s flagship public university) all schools which are great value for people who do not qualify for financial aid and don’t feel like paying $280,000 for college.

  15. It's a bubble and everyone knows it. This kind of debt load is simply not sustainable. The question is just how much wealth can be transferred from the working class to the oligarchs before the economy ceases to function and we have a worldwide depression.

  16. Is this just federal debt? The article doesn't really specify, except in mentioning that some students topped out. If it's just loans through federal programs to students and parents, it is far from representing the entire formal debt load many families take on.

  17. The scaling back in educational attainment from Bachelor's degrees to Associate's is as much a reasonable ROI calculation as concern over cost. Many certificate programs result in higher paying jobs in more stable environments than to liberal arts or even some professional degrees. While anecdotal, many people I know are in fields completely unrelated to their majors or concentrations.

    To top it off, you have employers unwilling to pay a reasonable wage for the skills that are out there, meaning most potential employees are far overqualified for what they are eventually hired to do. Why incur debt for that?

  18. There is another form of college loan debt that some families use, which is cash out refinancing. This can add tens of thousands or hundreds of thousands, and many more years, to parents mortgage indebtedness. Are these dollars included in the $1.4 trillion calculation?

  19. It is a relief to see this topic covered but there is also the issue for young adults who don't have parents who can help and single parents who have used college loans as a way to springboard into a better economic situation for their children. People without that family or social network who live without a second income in their households are devastated by student loans as they try to make late adjustments to their careers and to help stay off other socially and psychologically traumatizing options that fill in when the other parent has checked-out. The early reforms didn't offer much help for people in this category and the conversations still don't address this issue. There are many adults out there now in their 40's and 50's being booted out of the workforce by a technology economy and suffering moving to things like the "fast-food" industry to stay alive. We need a conversation covering this extended group as well as the "average" student. Education was a promise at one time but with the middle-class being gutted like a fish there is a whole lot of pain out there except for the debt collection industry (largely owned and funded by stakeholders in the banking industry).

  20. If you decide to have children it is your responsibility to clothe, feed and educate them. This means saving from the moment you are aware of their impending birth. This may mean buying fewer goods and foregoing holidays. It means sacrifice. For many reasons, many still will not be able to save enough and for them loans are necessary. If you start from the standpoint that college education is 100% your responsibility, your path will be easier - not easy, easier.

  21. Frm hen3free below...

    "if businesses have decided that every job they offer requires 16 years of schooling...."

    Business have decided no such thing. Today, degrees represent "signaling"--most certainly not required. Moreover, if nearly received college degrees, graduate degrees would become even more important signifiers....then next perhaps phd.s , then the glorious situation where we all remain in school forever.

  22. To destroy a nation, weaken its schools.
    If young people cannot afford education, what happens?

  23. A few years ago I was gobsmacked when a college professor about to go into full time retirement at the age of 60 complained about his ””low” salary at a private college charging $45k in tuition and room and board. In response to my question he told me he had never done anything to improve revenue for his employer. These people inhabit another planet. No wonder students are choosing public colleges that charge half or less the price of their private counterparts. In the 70’s I went to a private college that charged $2k/semester and now charges $20k, for tuition alone and is failing. That is no more affordable now than it was then.

  24. Either we must promote ignorance or learning; the former has been tried and shown that it leads to ruin, the latter is universally known to be the way to a better future. This being the case, it is in the collective interest of the nation to have higher education universally affordable. It is not the same as saying everyone should have a new car, and the taxpayers will pay for it! No, it is in our national interest to have people who can compete for the technological work of the current and future times. The social Security system will collapse if it is not adequately supported; the health care system will be reserved for those who can afford it either by good jobs or the inheritors of great wealth currently being disbursed in Washington. The doom of student debt is here now. It crushes opportunity to invest in the future and homes for new families. Failure to address this in the interest of the students rather than the bankers leads to economic suicide. Wake up.

  25. Perhaps more and more Americans are simply waking up to the fact that spending $100K or more on an undergraduate degree in sociology from a second- or third-rate college or university is simply a bad investment. And this is not to pick on sociology, but simply to give one example of what are undoubtedly dozens of so-called academic disciplines that are not worth the time or money in which to earn degrees. The best advice for parents and students is that not everyone needs (or is prepared) to go to college, not all colleges and universities are worth attending, and not all degrees are worth pursuing. Be a discerning consumer and run the numbers to see if a college education will pay off for you (one size does not fit all) and then choose accordingly.

  26. College is grotesquely overpriced, and as much as possible needs to be moved to online delivery for free as a public good.

    Exactly what are we waiting for ?

  27. Parent loans can have negative effects too. We are parents in their mid-70’s who took out parent PLUS loans for our three children. It took us many years to repay these loans, years when we should have been saving for retirement. Thus, we are living a much more constrained retirement than we would have otherwise, and all three children accumulated significant debts too. If we had it to do over, we would encourage them to consider very carefully whether four-year private college was right for them. As turns out, it was not for two of the three. If they had still wanted to pursue higher education, we would have paid only for community college followed by state college. By the way, the authors’ implication that public higher education is inferior has been shown not to be true.

  28. If a college education is considered nothing more than a path to a good paying job, then there are reasons for public dissatisfaction with the US higher education system. But I would never trade the information and knowledge I gleaned from my college years for a few more bucks, a bigger house or a flashy car.

    In an era of "post- truth" and rising discontent with democratic norms, to say nothing of responsible citizenship, the value of education is not easily measured by mere monetary analysis.

  29. To me there is no difference with a high student loan that will paralyze a person for 20 plus years or not paying it, essentially defaulting on a loan which congress mandated that you can't default. But if 50% of students choose not to pay, think of the wonderful financial crisis that would result. The orange beast in the whit house wouldn't know what to do, the banks would scream for a bail out and things would tailspin. Please think about this and default.

  30. In the late 1950's I went to the Uni. of Illinois for $2,000 a year that included tuition, room and board ,books, clothes and transportation. $2,000 increased by 2 percent inflation for 59 years is $6,433 times 4 years equals $25,733. Today it is very hard if not impossible to find a college for less than $25,000 a year. Someone is getting very rich.

  31. Colleges need to track & report student debt amounts. Some schools, like Columbia College in Chicago, sell expensive degrees in specialized fields like film, TV. Working class kids think that a degree being offered = viable career and take on crazy debt to pursue their dreams. It’s not until they graduate that the realize many if not most talented people work for no or low wages before they even get a chance to earn a living in the field. It’s unconscionable to allow these schools to charge such high tuition when there are so many alumni with suffocating debt.

    Another bogus degree is Interior Design. A “career” rarely if ever viable for talented people who are sponsored/subsidized by a spouse or family.

  32. More students may be wisely choosing to complete general education requirements (earning an associate degree) at a community college. This allows students to save money as well as explore different career fields that lead to a bachelor's degree.

  33. I left academia in 1993, and it feels as if I got out just in time. Looking for a new job, I attended my discipline's hiring convention and saw that the vast majority of jobs were either part-time adjunct positions or short-term (one to three years) non-renewable jobs.

    For me, that was the handwriting on the wall. I gradually transitioned into a different line of work, and I do not regret it at all.

    Meanwhile, administrative positions have multiplied at every institution I'm familiar with.

    When I was a professor, many of us noted that administrators justified their existence by calling meetings, sending out surveys, and asking for written reports, activities that interfered with what we saw as our primary tasks, preparing and teaching classes, grading, helping students who were having trouble, counseling successful students about career paths, and maybe grabbing a bit of time for research.

    Oddly enough, when I was an undergraduate (1968-1972), my 1700-student alma mater got along with a president, a part-time (!) academic dean, a dean of women, a dean of men, a director of financial aid, a director of alumni relations, a comptroller, and a couple of clerical workers for each of them. In my senior year, the comprehensive fee for tuition, room, and board at this private college was $2700, at a time when the median household income was around $12,000.

  34. Today's students may need to consider what past generations did, not take on massive debt at such a young age. Employers still offer tuition assistance. Working full time and going to school is difficult, but massive debt is worse and can impact someone for decades. Don't spend thousands on an education with poor employment prospects. Colleges maybe non-profit, but reality is they are all about the bottom line and they are not the students friend.

  35. This is a nice idea until you do the math.

  36. It is not problematic that students are enrolling in associate degree programs. It is an ideal first step for the student who is astute enough not to overpay for 100 & 200 Level courses. General Chemistry, Accounting 101 and Calculus are covering the same concepts whether you pay community college prices or whether you pay as much as 10x more for the exact same course so Expensive U can sustain an athletic program.
    The canary in the coalmine is signaling problems the longterm viability of expensive schools.

  37. I would love to see the US tax code adjusted to make it possible for employers who pay off student debt to write it off as a business expense.

    Imagine a human resources environment where companies recruit quality students out of High School by signing them to contracts. Under the contract the student gets Room, Board and Tuition paid along with summer internships. Upon graduation, the student goes to work for that company or can walk away for the price of their education.

    Not only would this help many get ahead, it would also encourage students to take degrees with real market value instead of gambling that what they take will be in demand after they finish.

  38. It does seem that financial pressures are forcing many students requiring loans to rationalize their selection of schools and courses of study. Market forces in action.

  39. The mean is not the statistic I'm worried about. I'm much more worried about the median and the 90th percentile. There are many students that graduate with no or little debt and make the mean look not-too-concerning. Please share a more relevant statistic that captures the seriousness of this problem for the more indebted students.

  40. This enormous student debt is one of the great scandals of American society. How is it that institutions which profess the well-being and success of their students also indentures their charges? I am an academic, with positions at four graduate schools, so I have some insight into the cause of this: the alarming, tumorous growth of university administrations. An article in the NY Times several years ago nailed it. It is standard now at a large university to have dozens of highly-paid positions like "Associate Vice Provost for Student Affairs", or "Senior Associate Dean for Student Life." It's perverse. Here's what I recommend: For a university to receive federal grants, from NASA, NIH, National Science Foundation, wherever, it's administrative budget must not exceed, say, 5% of its total operating budget. Plain and simple.

  41. Mr. Kantrowitz is missing a huge part of the equation when criticizing associate degrees. It's not just the affordability of college; it's the return on investment. A 4-year bachelor's degree costs more but provides less. A 2-year craftsman, whether in construction or networking, will likely out-earn their 4-year counterpart for a decade or more. If they save and invest their money, there's a good chance their economic outcome will be more favorable in the long run. Less debt with an earlier start on economic independence. The 4-year graduate meanwhile has to fight with unpaid internships and stagnant wages. A typical 4-year degree simply isn't worth as much anymore.

  42. While student loan debt is crushing young people and preventing them from settling down and starting families, it should be noted that at this point there have been YEARS of headlines warning about taking on a lot of college debt because there not enough jobs that pay enough to live and repay these loans. Yet, people keep signing on and taking them. I don't know if it's arrogance: "This won't affect me because I'm smart and know I'll get a high paying job," or ignorance, but whatever it is, it becomes difficult to feel for people who are aware of the dangers of taking on so much debt but do it anyway.

  43. The burden of student debt is very sad. Back in the 60's when America was Great, I walked into the state office of employment and that morning found a 2 month ugly-, sweaty- summer job that, combined with a college meal job, covered over 90% of the cost of my junior year. This included 2 semesters of full out-of-state tuition at a state university in the top-ten in my field. A generation later, my daughter observed that "a summer job would not make any difference in the cost of a year at our state university".

    So a good step to MAGA would be to have college costs comparable (say 80%? ) to pay for 2 months of ugly-, sweaty-. available- summer work. So come on GOP, seriously reduce the dedicated-student's cost of good education.

  44. There is also a segment of the population of graduates who had no debt because their parents had lived far below their means for countless years to enable payment of those skyrocketing tuition bills. In life, we all have choices.

  45. One would like to see a large percentage of graduates in the segment you cite. What is that percentage?

  46. The "average student's" debt load is less than that of a new car. How is this "America’s student loan problem?"

  47. While you are visiting in Helsinki for #TrumpPutinSummit check out how our education system works out. I'm studying in university and I don't have a loan, my parents haven't helped me and I have been able to pay back a mortgage while studying...
    In our country education in university is almost free (for me it costs 130€ per year) and government gives money to us every month when we educate ourselves.

    (And welcome to Finland!)