18 Grim Realities of the Unprecedented Student Loan Debt

Citizens are not entitled to a college education. You are expected to qualify for admission and pay your way. The private and public sectors have stepped in to facilitate enrollment because continuing education benefits the community and economy. But, everything has a price.

Colleges offer billions in grants and loans, so almost everyone has a shot at a college degree. This forms its own economic dynamic, because extending credit has to be backed by guarantees of repayment. With over a trillion dollars out there, economic tension accelerates. But, when there is a significant resistance to repayment, you have a problem.

According to Forbes, “Student debt loans are a problem, and a serious one. Not only do they create a significant drag on short-term economic activity, but they will stunt our long-term growth as well. And the situation is deteriorating."

18 Grim Realities of the Unprecedented Student Loan Debt: The Consumer Financial Protection Bureau set the debt at $1.2 trillion at the end of 2013 with more than 1 in 10 graduates owing $40,000 or more. People who owe that kind of money either will avoid the obligation or sacrifice other goals.

1. Entering a slowly recovering national economy, graduates must forgo their dreams of buying a home and building a family.
In a heavily debt burdened generation, they compete for the same careers in a climate that drives down compensation and slows their individual economic progress.
2. When 70% of college graduates are in considerable debt, it affects the generation as a whole.
3. USA Today reports that 15% of students (600,000) are so burdened that they default on their loan payments within the first three years.
4. With 15% carrying more than six figures in debt, that is money taken out of the general economy.
5. Pew Research Center, found that 40% of heads of households are under age 40 paying off their respective student loans.
6. A “wealth gap” grows between those with student debt and those without. Those with no student debt have accumulated roughly nine times as much wealth as debtor households.
7. That means the median net worth of young households with student loan debt is 20 percent lower than the median net worth of young households without student loan debt.
8. Over 40 million Americans now have at least one outstanding student loan - up from 29 million consumers in 2008.
9. As the number of borrowers and the size of their debt increased, their career salaries have declined. The Wall Street Journal research indicated that, while indebtedness increases by 35% between 2005 and 2012 the median salaries dropped by 2.2%.
10. Sadly and surprisingly, 260,000 U.S. college graduates earned at or below the federal minimum wage last year.
11. With the cost of college and professional school tuition 275% higher than forty years ago, you are into a second generation of inflated costs.
12. The Association of American Medical Colleges (2012) found "The median education debt for indebted medical school graduates in 2012 was $170,000, and 86 percent of graduates report having education debt."
13. The cost of law school also increased dramatically - with students leaving public universities $75,700 in debt and private law schools with $125,000 owing according to the American Bar Association.
14. The cost of law school also increased dramatically - with students leaving public universities $75,700 in debt and private law schools with $125,000 owing according to the American Bar Association.
15. The Huffington Post says, "About 51 percent of Americans with student loans made directly by the Education Department, known as Direct Loans, have either fallen behind or are not making expected payments, according to data on the $686 billion portfolio."
16. Approximately 7 out of 10 graduates wish they had done more in school to prepare for the real world, often finding themselves moving home to their parents.
17. Fifty years ago, the median age for women and men entering their first marriage was 20 and 25 respectively. According to Pew Research, those numbers are now at 27 and 29. A US News analysis that students use their government supported funds for personal expenses, like bills and vacations, is disconcerting.
18. A US News analysis that students use their government supported funds for personal expenses, like bills and vacations, is disconcerting.

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