Student loan debt is now more than credit card debt
Student loan debt — totaling more than $800 billion — outpaced credit card debt for the first time last year and is likely to top a trillion dollars this year, the New York Times reports.
“In the coming years, a lot of people will still be paying off their student loans when it’s time for their kids to go to college,” Mark Kantrowitz, publisher of FinAid.org, told the Times.
Two-thirds of bachelor’s degree recipients graduated with debt in 2008, compared with less than half in 1993, the Times writes. Last year, graduates who took out loans left college with an average of $24,000 in debt.
The mountain of debt is likely to grow more quickly with the coming round of budget-slashing, the Times writes.
In Georgia, cuts in the HOPE scholarship program will mean increased borrowing costs for many students in the future. And federal Pell grants for low-income students are expected to be cut, the Times writes.
Some education policy experts told the Times that the mounting debt has broad implications for the current generation of students.
“If you have a lot of people finishing or leaving school with a lot of debt, their choices may be very different than the generation before them,” Lauren Asher, president of the Institute for Student Access and Success, told the Times. “Things like buying a home, starting a family, starting a business, saving for their own kids’ education may not be options for people who are paying off a lot of student debt.”
What’s your situation or what will it be?
Have you changed your college or career plans for financial reasons? For example, is going to a technical college to learn a trade more appealing than it was a few years ago?
Are you trying to keep things in perspective by looking at the long-term value of a college education? Or is the tough job market for graduates in recent years changing your view?
- Henry Unger, The Biz Beat
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123 comments Add your comment
lance
April 12th, 2011
1:35 pm
No, I’m not saying those you listed are freeloaders. What I am saying is the government doesn’t produce anything per se. We have government employees retiring at 53 (such as former police chief of SF Heather Fong – $277,656 per year, James Lynch, assistant police chief at $252,997). More than 1 in 3 San Francisco city workers have pensions exceeding $100,000 with over 100 exceeding $200,000. They have a deputy police chief who made $516,118 in 2009.
I have a friend who retired from the IRS who has a pension of over $75,000/year plus health benefits. These are but a few examples of government waste in my opinion.
Many government workers save zero, yet have pensions those in the private sector can only dream about. We in the private sector can look forward to maybe 18 grand tops from social security.
At one time those who worked for the government were called servants… now, those who generate tangible products which are tangible are serving those who work for the government.
And, government employees now make more on average than those in the private sector doing the same job. The salary figures do not include the value of health, pension and other benefits, which averaged $40,785 per federal employee in 2008 vs. $9,882 per private worker, according to the Bureau of Economic Analysis.
So, if you think increasing the size of government is good – OK. I don’t.
TnGelding
April 12th, 2011
1:53 pm
Well, I WAS impressed by the quality of the contributions here, but they’ve degraded.
The government invests in education and reaps a return through taxes on higher incomes the well educated earn.
TnGelding
April 12th, 2011
1:58 pm
Part of what the government produces (spends?) is included in GDP, so somebody must think it is valuable. We’re trending in the right direction with private sector jobs slowly on the rise and government jobs being eliminated. HOPE springs eternal!
Jackson
April 12th, 2011
2:10 pm
“The government invests in education and reaps a return through taxes on higher incomes the well educated earn.”
That is the old train of thought and what we have now is a trainwreck!
DB
April 12th, 2011
3:00 pm
I’m amazed at the amount of ‘experts’ arguing back and forth on this blog (and other blogs). No wonder, there are very few intelligent politicians, economists, Rhodes Scholars, and successful CEOs out there; they are all commenting on this blog! Look; the fact of the matter is that none of you have the answers; most have a one-sided view of the world only seen through your own eyes. It’s one thing to have ‘opinions’, its another to call someone WRONG because their opinion and experiences differ from yours… *Climbs off soapbox. But, by all means, keep arguing… Its very entertaining!
TnGelding
April 12th, 2011
3:02 pm
The trainwreck was the Ivy League cowboy who wasn’t willing to pay for two wars, Homeland Security and Medicare Part ‘D’, and then had the gall to suggest privatizing Social Security after giving the money needed for transition away in tax cuts.
TnGelding
April 12th, 2011
3:04 pm
I’d opine that we all have workable answers. At least it wouldn’t hurt to try them. The pols are paralyzed.
Peepeye
April 12th, 2011
3:06 pm
According to the New Republic, the largest for profit college, the University of Phoenix, graduates less than 10% of its students within 10 years. Each person who goes to Phoenix leaves with debt of between $40,000 – $60,000.
Peepeye
April 12th, 2011
3:31 pm
The thing that most people need to remember like all of the “other shoulds” in our lives is that they’re not for everyone.
Everyone does not need to go to college.
Everyone does not need to buy a house.
Everyone does not need to get married.
Everyone does not need to have children.
Most people would disagree but everyone does not need to have a job. I know plenty of people who have a job and all they do is mess it up.
So, before you sign on and become an “indentured debt slave,” you need to really evaluate what you want and need.
My rule is anything that I have pay for more than a few years, I don’t want it.
lars
April 12th, 2011
4:06 pm
peep for prez
KC
April 13th, 2011
1:25 am
I think all these comments are very interesting I am a 24 year old college graduate (graduated at 23) and am 23,000 in debt (right around the average). I was lucky enough to find a decent job, but I’m definitely not where I want to be and feeling the student loan burden already. If I had the choose to go back knowing what I know now I would of still went to college. I feel that I did everything right: didn’t borrower more than I needed, worked all 5 years, had a great GPA. When I look at my friends who graduated doing everything totally opposite of me and coming out with little to no student debt I find that crazy! I need to do more research on the HOPE scholarship but I think financial aid should be based on merit not need. If these businesses are wanting competent workers WITH degrees then the little financial aid avaliable should go to the students who deserve it.
Hmm...
April 13th, 2011
1:44 am
Henry, the brilliant gentleman and scholar Charles Hugh Smith addresses the truth of this scam in his blog today. oftwominds dot com
Destin Dawg
April 13th, 2011
6:14 am
Mercer, the bar tender is making more than you are !!! and has a career path to Management that could be up to $100 K… casual dining… we need tech majors in medical, engineering, business and math/science teachers… not lawyers !!
dont know what to do
April 13th, 2011
8:45 am
i agree that student loan debts are ruining many yung people out of college. take me for instance i defualted on my student loan that i thought was in deferment. i got back on track with sallie mae paying them every month. next thing i know my wages are being garnished by a third party saying they work for sallie mae. how do i figure this out. everytime i call sallie mae and try to get someone on the line, i speak to someone with a strong arabic accent and cant understand, when i ask for their supervisor they just keep me on hold thirty minutes at a time…is their anyone i can send a letter to, to get this straightened out?
Lindsey
April 13th, 2011
12:25 pm
Hey Destin Dawg, I have a full time paying job with my liberal arts degree. My husband is a middle grade math teacher who is looking for a job. Guess who brings home the bacon, I am thankful for my liberal arts degree, at least it is a degree is something. GO DAWGS!!
Mercer
April 13th, 2011
12:32 pm
You tell em Lindsey!!! Go Bears!!! Liberal degrees are REAL!
HARDTIME=THINKHARD
April 13th, 2011
2:52 pm
HARD TIME, better THINK HARD:
TECH SCHOOL IS GOOD SOLUTION if you can’t afford one at this economy crisis.
I am a college graduate, but I think Tech schools do give you the real skills that you need to do the job well and well-paid for a short period of time (9-14 mos.). eg. Aviation Technician or Medical Assistant. My cousin is an Aviation Technician. He has a great job and great benefits.
On track for $1 trillion: Student loan debt greater than credit card debt
April 13th, 2011
5:40 pm
[...] June, for the first time in history, Americans owed more on their student loans, a record $833 billion, than on their credit cards, $826.5 billion. The amount owed on student [...]
On Track for $1 Trillion: Student Loan Debt Greater Than Credit Card Debt | | Payoff Credit CardsPayoff Credit Cards
April 14th, 2011
5:13 am
[...] June, for the first time in history, Americans owed more on their student loans, a record $833 billion, than on their credit cards, $826.5 billion. The amount owed on student [...]
Free ain't always free
April 14th, 2011
8:17 am
@Uncle Sam
First, thank you for serving our country and being part of the military that protects our nation but please understand that your education was not “free”. Everyone in the country (a lot of those currently struggling to pay off student loan debt) chipped in by paying taxes so that you do not have debt.
Yvonne
April 14th, 2011
11:06 pm
I am a co-signor and my son did not receive his degree after 190k in debt. The system is broken and yes, I do feel it is a scam especially from the Universities who allow debt to pile up and as a parent you can’t get copies of transcripts to see if the student is doing well until it is too late. SM is my lender and they are calling me 6-8 times a day and they are rude and using threats that will place me in a default in 3 months. I pay 200.00/ month and they need a payment of 1800/mth. There is a hardship in which I do not care to talk about but I need to know how to get the money that I am paying to get applied to the principle of the loan instead of the interest? They are not nice and it seems they really don’t want the 200/month I am paying. Every time I make a payment they call and it seems they are angry that I made a 200 payment. will getting a lawyer help?
drink up
April 16th, 2011
9:50 pm
I got a degree from ga state in liberal arts and can’t find a job anywhere after hundreds of resumes. A friend working at a hotel bar told me he makes $60,000-$70,000 each year mainly from tips. I’m going to bartender school and hope I can find a job at a big hotel. The degree from ga state is worthless.
On Track for $1 Trillion: Student Loan Debt Greater Than Credit Card Debt | Atla$ $ucce$$
April 17th, 2011
2:29 am
[...] June, for the first time in history, Americans owed more on their student loans, a record $833 billion, than on their credit cards, $826.5 billion. The amount owed on student [...]