The average Minnesotan student leaves school $31,497 in debt. Nationally, some students are strapped down by as much as $100,000 in student loan debt. The $1.2 trillion in outstanding education debt is more than that of the rest of the world‘s student loan debt combined.
Expert Mark Kantrowitz has suggested not borrowing more for an education than the expected starting salary. But salaries are not keeping up with the rise in tuition. Bloomberg reports that the rate of increase in college costs has been “four times faster than the increase in the consumer price index.” It also notes that “medical expenses have climbed 601 percent, while the price of food has increased 244 percent over the same period.” Another way to look at it is that in the last 30 years, the cost of a college degree has increased 1,120 percent.
The student-loan crisis may be worse than the 2008 mortgage crisis. Today’s students are tomorrow’s homeowners and most of them are strapped with school loan payments and or default which makes them ineligible for home loans. Currently, student loan debt totals more than U. S. credit card debt. Student loans can’t be discharged in bankruptcy and are very hard to have waived on a hardship basis. The amount of debt and delinquencies are climbing. Nearly 1 in 5 households is paying off student-loan debt.
Congress should be acting on this, and fast. Chairman of the Workforce and Education Committee Rep. John Kline should be addressing the problem of student debt, instead of penning bills to increase student loan interest rates.
I recently joined The Student Debt Crisis. You should, too.