Death, Taxes, and Loans: Student Debt Jumped 56 Percent in a Decade
Benjamin Franklin is generally credited with the saying “nothing can be said to be certain, except death and taxes.” But if the founding father were alive today, he might have to add something else: soaring student loan debt.
New data released on Tuesday reveals that the average student loan debt for a graduate of a four-year public or private college in the United States increased 56 percent between 2004 and 2014. During that period, the hike from an average of $18,550 to $28,950 was two to three times the rate of inflation in most states.
That’s according to the 10th annual study on student debt released on Tuesday by The Institute for College Access and Success, an Oakland, California–based nonprofit that works to make higher education affordable and accessible.
“Borrowers are graduating with a lot more debt than they did 10 years ago, and the class of 2014’s average debt is the highest yet,” said TICAS president Lauren Asher in a statement. “Student debt has rightly become a major policy issue. Students and families need better information and better policies to make college more affordable and debt less burdensome.”
The Obama administration has addressed the cost of higher education in part by calling for community colleges to be tuition free. But with $1.3 billion owed by U.S. graduates and the cost of college spiraling ever higher, it’s no wonder student loan debt has become a hot topic in the U.S. presidential race.
In the Oct. 14 Democratic presidential debate, front-runners Hillary Clinton and Bernie Sanders agreed that undergraduate tuition should be free. Critics have noted that some Republican candidates have given short shrift to the topic. However, Republican front-runner Donald Trump has previously castigated the federal government for making money on student loans.
A recent analysis by The New York Times found that a 5 percent tax hike on the richest 1 percent of Americans would raise enough money to pay the full tuition of every kid at every public college and university in the United States.
Coming up with real solutions could certainly appeal to recent grads. The TICAS study comes on the heels of a Gallup-Purdue survey of college graduates that found about two-thirds of recent grads with debt don’t believe their bachelor’s degree was worth the cost.
Debt-burdened graduates may be feeling dissatisfied, but as TICAS points out, they have an advantage over many of their peers. Although the 2014 unemployment rate for a new college graduate was higher than the general population’s at 7.2 percent, that’s still less than half the unemployment rate for millennials who are job hunting with just a high school diploma, according to the report.
“Despite rising debt levels, a college degree is still the best path to a job and decent pay,” said Debbie Cochrane, TICAS research director, in a statement. “For students who don’t graduate, loans are much harder to repay. Even a small amount of debt can be burdensome if you have limited job options.”