American students are stuck in debt and unsatisfied with value of college degrees
Almost two-fifths of adults under 30 have student debt.
Attending college and university can be a costly undertaking for the average student. To pay off thousands of dollars in tuition fees each year, many Americans take on student loans.
However, new research has revealed that many students and post-graduates are struggling financially, taking on multiple jobs and are less satisfied with the lifetime financial benefits of obtaining a degree.
Student loan debt is also growing at a faster speed than any other household debt – soaring by an incredible 457.68% since records began in the first quarter of 2003.
In a recent investigative article, Pew Research analyzed data from the mid-year release of the Federal Reserve Board’s 2016 Survey of Household Economics and Decisionmaking.
The survey found Americans owed more than $1.3 trillion in student loan financing at the end of June 2017. This is more than two-and-a-half times the amount owed by students in 2007.
Around two-fifths (37%) of adults under 30 possess student loan debt. This figure includes those with loans in deferment or forbearance, but excludes credit card debt and home and other loans taken out for education.
Although fewer (22%) older adults, those aged 30-44, have loan debts, this isn’t simply because they have had more time to repay their commitment. Data gathered by the National Center for Education Statistics shows young adults are more likely now, than in the past, to take out loans for their education.
In 2016, the median borrower owed $17,000 in educational debt. However, the amount varies significantly among different age groups and is also dependent upon educational attainment levels. For example, the median amount owing of borrowers of all ages with outstanding loans who achieved less than a bachelor’s degree totalled $10,000. Debt among those holding a bachelor’s degree was $25,000 and for those with post-graduate degrees, considerably higher again at $45,000.
Students are also being forced to work multiple jobs to pay back debt. Around one-fifth (21%) of employed adults aged 25-39, with at least a bachelor’s degree and outstanding student loans, have more than one job. Comparatively, those without student debts are half as likely (11%) to have multiple jobs.
Just over half (51%) of bachelor’s degree students aged 25-39 with outstanding debt are satisfied the lifetime financial benefits of their degree outweigh the costs. However, a higher proportion (69%) of young college graduates without outstanding student loans are convinced of the lifetime benefits of their degree.
So what’s the payoff? The research shows, on average, Americans aged 25-39 with at least a bachelor’s degree and outstanding educational debt have higher family incomes – the individual’s income plus that of his or her spouse/partner – than similarly aged individuals without a bachelor’s degree (regardless of loan status).
While personal student loans and credit cards can help, beware of missed payments and extra fees and taxes. Compare a range of providers and check out our guide to discover the best options to get you back in the black.