The Class of 2014 graduated college with the highest average student debt on record – a little more than $33,000 per loan-holding student. This June, the Class of 2015 will almost certainly snatch that unhappy record away from them, along the record of highest percentage of students with those loans. Twenty years ago, it was fewer than 50%. Now it’s north of 70% and rising steadily.
It’s not an exaggeration to call this a crisis. This is our incoming pool of professionals, and as young as twenty-two, they have to think first and foremost of managing these massive debts. A graduate facing that kind of debt has limited options. The networking and jockeying and climbing the ranks to find a stable, solid career in their field may take too long. Payments become due 30 days after graduation, obligating many to take the first job that comes their way. And many kinds of jobs are scarce.
President Obama has spoken out strongly in favor of income-based repayment plans, which help widen those options, but they don’t reduce the over-all burden. If a student’s loans are federal, there are several options for loan forgiveness, but they all obligate someone to work in the public sector – they are for teachers and state or federal employees. Many programs take as long as a decade of work to reach loan forgiveness. And they don’t allow you to pursue further education – there are no dedicated forgiveness plans for masters degrees or PhDs.
After mortgages, student debt is the most massive debt in the US–$1.16 trillion dollars and counting. Burdened with tuition rates that are continuing to climb far ahead of inflation, the lion’s share of that debt is being taken on by young people still trying to secure their very first job.
How long can we possibly have before the situation reaches a tipping point, with either an entire professional workforce literally unable to escape debt, or a generation of students whose indebted parents discourage them by word or example from attending college at all?