Student Loan Debt Has Nearly Tripled (npr.org)

An anonymous reader shares a report: Recent college graduates who borrow are leaving school with an average of $34,000 in student loans. That's up from $20,000 just 10 years ago, according to a new analysis from the Federal Reserve Bank of New York. In that report, out this week, the New York Fed took a careful look at the relationship between debt and homeownership. For people aged 30 to 36, the analysis shows having any student debt significantly hurts your chances of buying a home, compared to college graduates with no debt. The cliche of "good debt" notwithstanding, the consequences of borrowing are real, and they are lasting. The report paints a mixed picture of how student borrowing has evolved over the last decade, since the financial crisis. There are some bright spots: For example, student loan defaults peaked five years ago and have declined ever since. And repayment seems to have slowed down among high-balance borrowers -- those who owe $75,000 or more. Meaning, after 10 years, they have paid down only one-quarter to one-third of what they owe.

Comments

To the college student who wrote this

[guruevi]

You failed math.

$34,000 from $20,000 is only a 70% increase, not a 300% increase. In those 10 years, the value of $20,000 went up to $27,600, so it's really only a 25% increase.

A 25% increase in student loans during a recession is pretty well within expected range.

Re:To the college student who wrote this

[aardvarkjoe]

The headline is referring to the total amount of student loan debt, which isn't totally related to the per-person amount of debt at graduation -- for instance, if more people are going to school and taking out loans; or if people are taking longer to repay their loans, the total amount of debt will increase even without the initial per-person amount increasing.

Of course, the way that the headline and summary were written were obviously going to cause confusion. Too bad that apparently stories are posted by retarded baboons here on Slashdot.

Re:To the college student who wrote this

[Anonymous Coward]

What's tripled is the amount of student debt outstanding, which has grown to $1.3T. (It's buried in the article).

Re:New math

[Dayze!Confused]

From TFA:
In the absence of more targeted grant or scholarship programs, more people are taking out student loans, and they are borrowing more. All that borrowing adds up to a total of $1.3 trillion, nearly triple what it was a decade ago.

Yeah, TFS didn't go far enough down in TFA to substantiate the TFT.

Re:New math

[msauve]

"34 / (34 - 20) = 2.4%"

Say what?

34 / (34/20)
34 / 14
~2.4
240%

And it's not clear what you think your formula represents. The GP was correct, as far as the average debt figures given in the summary. The tripling of debt is mentioned in the actual article, and refers to total student debt.

Meanwhile in Germany ...

[Qbertino]

... I'm ready to enroll in part-time college and am torn hither and fro wether I should go to the local University (classic CS, bland curriculum, ugly wasted 80ies architecture campus, further away from where I work, PhD option, higher rank, Math 1 through 5 (scares the shit out of me)) or the local University of Applied Sciences (Media CS, neat Master Programs, easy curriculum, brand new posh campus with all the bells and whistles, more chicks on the faculty (so I hope :-) ), PhD option on the ropes (might change within the next few years), 'lesser' rank, Math 1 through 3 (scary too, but manageable)).

Mind you, aside from semester fees of ~280 Euros these options I'm toying with are free (as in beer) and those fees actually are a bargain because as an enrolled student you get public transport for free in the entire state (there actually is a little problem with students enrolling just for the benefits alone).

Bottom line:
It sucks to be a student in the US.

Re:Doesn't anyone pay as they go anymore?

[WrongMonkey]

Average undergraduate tuition and fees and room and board rates charged for full-time students in degree-granting postsecondary institutions, by level and control of institution: 1963-64 through 2015-16

https://nces.ed.gov/programs/d...

Short version: In constant dollars, tuition has doubled since your bottle collecting days.

Re: cost up, quality down

[Thud457]

And the reason tuition rates are going up is because of the increase in the money supply in the higher education system, which itself is entirely caused by the increased availability and ease of acquiring of student loans.

That's a big factor. But you're also overlooking that in the last ~25 years, most states have slashed state funding to state universities.
So all these students in the "second tier" of the system are getting a double whammy. These kids would mostly be from what used to be the middle class as opposed to most of those going to an ivy league school.

Re:Doesn't anyone pay as they go anymore?

[KalvinB]

Back in the 1990's college was affordable enough that you could work part time and pay the bill.

Arizona State used to cost 1200 a semester or 2400 a year. At $5 an hour minimum wage that's 480 hours to pay your tuition. 1/4 of full time.

Arizona State now costs 5000 per semester, 10,000 per year. At 7.50 minimum wage now, that's 1333 hours required to pay your tuition. More than 1/2 time.

That's why total loans are going up significantly.

Re: cost up, quality down

[interkin3tic]

"Opulent campuses" is a tricky one to quantify objectively. There's a lot of cherrypicking data. "A SCHOOL IN BOSTON HAS AN INDOOR HEATED POOL, OMFG." doesn't say shit about all those other places tuition is raising that don't.

Administrator cancer is more documented.

You left out though funding cuts. Boomers took their cheap education then decided fuck the greedy next generations. More than a little projection there. "These selfish millennial assholes don't deserve indoor pools! I want my taxes to be $20 lower instead!