STATE LEGISLATURES MAGAZINE
Sad for Grads: Record Student Debt
Editor's note: The original version of this story incorrectly stated that the majority of 2013-14 graduates will leave school owing an average of $26,500 in student loans. It should have stated the majority of 2011-2012 graduates left school owing that amount.
An estimated 1.85 million Americans will receive their bachelor’s degrees this year—many at joyful spring commencement ceremonies this month. But for about 60 percent of the grads—more than 1 million—those hard-won sheepskins come with a hefty debt.
The majority of 2011-12 graduates left school owing an average of $26,500 in student loans, according to the College Board. Two statistics, reported in State Legislatures’ February cover story, “Higher Ed-aches,” help explain why: Tuitions at four-year institutions have risen 112 percent since 1990, while state funding has fallen 10.6 percent nationwide since 2008, with cuts in Arizona, Florida and New Hampshire almost 50 percent, thanks in part to the Great Recession.
Across the country, state lawmakers are looking for ways to make college more affordable, while also increasing institutional accountability. In the meantime, student debt keeps mounting. A February report by the Federal Reserve of New York showed student debt had reached $1.08 trillion at the end of last year—well above Americans’ credit card debt of $683 billion—and an increase of more than 300 percent since 2003, when student debt was only $253 billion.
Some economists worry the debt is a drag on the entire U.S. economy—by preventing young people from buying cars, houses and other big-ticket items. Others worry the fear of debt will keep many promising would-be students out of college entirely.