Students hoping that a college degree is going to make it easier to attain the American Dream might want to rethink that thesis. If anything, taking out student loans to go to college will either seriously postpone that dream or simply kill it. According to a recent student loan debt in the U.S. has soared by 149% since 2007.
Over the last 10 years, student loan debt in the U.S. has increased by $844.0 billion, reaching an all-time high of $1.4 trillion. At this time, a little more than 13% of the population carries at least one student loan. However, it’s becoming more common to have more than one student loan. The average number of loans is now 3.7 per person, up from 2.4 per person 10 years ago.
Over the last decade, the average outstanding balance has increased 62% to $34,144. On top of that, the percentage of borrowers who owe $50,000 or more has tripled. Next to a home, a college education is the second-largest expense an individual will have in their lifetime.
One bright spot is that while student loan debt accounts for the largest non-household debt and is the fastest-growing debt segment, the percentage of late payments has decreased since 2009.
Student loan balances are on the rise because the cost of education is going up–and seriously outpacing the rate of inflation. While student loan balances are soaring, the number of delinquencies is decreasing, which means Americans are managing their loan payments better than they have in the past.
Key findings from the study show:
The average student loan balance is $34,144
The average VantageScore (a consumer credit scoring model) for those with student loans is 25 points lower than the national average of 675
The average number of student loans is 3.7 per person, up from 2007’s 2.4
Student loan debt has soared 149%, but late payments have dropped 10.1% since 2009
“Generation X” has the largest outstanding balance at $39,802
“Generation Y” has the greatest number of loans at 4.4 per person
“Generation Z” has the highest percentage of loans in deferment at 77%
Regionally, the study found that those on the East Coast have higher student loan balances. That said, Gainesville, Florida is home to the highest average student loan debt at $42,400. Meanwhile, those in Glendive, Montana have the lowest at $20,200.
Many students have said they regret the cost of their education. Fifty-seven percent said they regret taking out as many student loans as they did, while 36% said they would have skipped college if they understood the costs.
Regardless of how much student loan debt you’re carrying, it has long-term consequences. Because of the record student loan debt (and household debt), many are putting off life’s major milestones, including buying a car or house, getting married, and even having children.
“Experian finds total student loan balances increased 149 percent since 2007,” Experian, August 29, 2017.
“Millennial College Graduates with Student Loans Now Spending Nearly One-Fifth of Their Annual Salaries on Student Loan Repayments,” Citizens Financial Group, last accessed August 29, 2017.