While student loan debt skyrockets, new grads' income just slightly up
Butch Dill, Associated Press
Student debt appears to be the new debt of choice, according to the New York Fed's quarterly report on household debt.
The report showed that Americans had $1.1 trillion in student debt in the first quarter. Until 2011 credit card debt surpassed student loans, but when compared with student loans the $659 billion in credit card debt looks easy to manage.
“Watching total student debt levels and delinquencies continue to rise, even while other areas of household debt heal from the recession has a slow-motion train wreck feel to it; it's fascinating but horrifying," wrote Danielle Kurtzleben for vox.com. "And even more horrifying is that young college grads' wages aren't keeping up with the trend.”
Student loan debt naturally rises with the cost of tuition. Universities across the country have raised tuition by 44 percent over the last 10 years, making the likelihood of more debt rise with it.
“According to a new Pew Research Center survey, it weighs heaviest on younger generations: 37 percent of households headed by someone younger than 40 has student-loan debt, which is a record high,” Elahe Izadi wrote for the National Journal.
“Student loan debt has climbed by more than 50 percent over the course of a decade, and that even takes inflation into account,” Kurtzleben wrote.
Pew also found that the average pay for a college graduate with outstanding loans is nearly $58,000 a year. But that’s the average for those over 30. For those in the first 10 years after graduation, the pay is much less, making the debt heavy and quite often unmanageable.
“In addition, the share of 25-year-old graduates with debt has grown from around 25 percent to nearly 45 percent over that period But annual pay does not appear to have kept up for bachelor's-degree holders,” Kurtzleben said.
Meanwhile, the National Association of Colleges and Employers reported that the average salary of recent graduates as of 2013 is $44,455, which is up 2.4 percent from 2012. But that increase didn’t manage to bring the pay back up to 2011 levels.
“It's still true that college has huge economic benefits, despite the costs and a crappy job market. But the gap between costs and returns appears to be diminishing,” Kurtzleben wrote.
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