Student debt has soared to a new record. The St. Louis Federal Reserve reports that borrowers owe more than $1.5 billion in student loans. About 44 million Americans hold these loans, with young people under the age of 35 shouldering nearly half of it.
Millennials apply the largest chunk of their paychecks to student loan debt. Many low-income student loan borrowers have debt burdens of 10 percent or higher — more than the average American spends on groceries.
The Federal Reserve Board’s Survey of Household Economics and Decision-making reports that Americans with education debt owe an average of $20,000-$25,000. This includes traditional student debt, credit card debt, and home equity loans. Whatever the number, this kind of debt can be demoralizing for any young professional hoping to purchase a home in the near future — especially with the rising costs of healthcare and childcare.
National student debt numbers continue to grow as the cost of higher education skyrockets. Over the last ten years alone, in-state tuition fees at public four-year institutions increased at an average rate of 3.1 percent per year beyond inflation, according to figures from the College Board.
This could be part of the reason why only about three out of five undergraduate students leave with a diploma. The other 40 percent leave with just debt.
It’s true that college graduates earn more than high school graduates, but other lucrative paths (trade schools and apprenticeships) exist outside of academia that are a fraction of the cost. Many trade-related fields do not require a college degree and enable people to “learn while they earn.” Four-year colleges and universities are not for everyone, and they don’t always provide the education to fill the well-paying jobs that remain vacant.
Employers should not expect a college degree for jobs that require it, and high schoolers who don’t excel at academics should be encouraged to pursue alternative education paths after graduation. Academia has created a monopoly, and despite all of the distrust that Americans have of the system, traditional colleges and universities feel entitled to increase tuition costs year after year, with limited return on investment for most.
The Trump administration has worked hard to remove the stigma from trade-based education. Until that stigma is gone, and four-year colleges feel the pressure of competition, student debt levels will continue to climb.
Brendan Pringle (@BrendanPringle) is writer from California. He is a National Journalism Center graduate and formerly served as a development officer for Young America’s Foundation at the Reagan Ranch.
