The Student Debt Crisis

Crossing the stage as a college graduate is one of the biggest accomplishments for many millennials, as it  marks their entrance in the “real world” and adulthood. With adulthood, comes major responsibilities: moving out, finding a job, and unfortunately,  finding out an effective way to repay loans, grants, and the like that accumulated during one’s time as a student at the same time.

Student debt in the United States accounts for $1.2 trillion of the country’s $16.7 trillion total debt, and it increases $2,698.30 to be exact, every second. The average 2016 college graduate has $37,172 to pay back, slightly up from $35,000 in 2015. For graduate and professional school students, they carry 40% of total student debt, even though only 26 percent of students pursue postgraduate degrees. Overall, graduate school and professional school students owe more than undergraduate graduates, with debt incurred ranging from $40,000- $60,000, varying on the graduate degree attained.

Why are students who are trying to better themselves by attaining higher education having to face such harsh consequences? The rising cost of higher education.

A November 2015 Time article reports that according to the College Board, a non-for-profit organization that helps students attain college success, tuition and fees during the Fall 2015 semester rose faster than inflation, climbing 3 percent from 2014. At public universities, where 45 percent of undergraduates attended, “sticker price” tuition for in-state students was $9,410, a 2.9% increase from 2014. Adding in other fees- room and board, books, travel etc., students had to shell out up to $24,061, showing a 3 percent increase. For students enrolled in private institutions, where 20% of undergraduate students attended, students were projected to pay as much as $47,831, reflecting a 3.4% increase. Because 80% of private school students get grants, families were paying an average net price of $30,300, up almost 5% in just a year, the article reports.


While 3-5% aren’t terribly large numbers, these increases are indeed significant for students because as prices are rising, the number of avenues for financial aid is falling, much quicker. This is often due to state and federal cuts, which ultimately affect how much the school has to give its students, and unfortunately, it is often students who have little previous financial cushion that suffer the most.  The effect of financial aid cuts also varies by region, with some states suffering more than others. A June 2016 The Guardian article reports that in Pennsylvania, a budget dispute between the governor and legislature caused severe cuts in funding in their colleges. Since 2008, state funding for colleges and universities in the state has plunged a whopping one-third, ultimately affecting Penn State’s accreditation status in 2016.

Many financial experts have a fairly simple solution for prospective college and graduate students looking to lessen the amount of future debt: cost-benefit analysis, the economic concept that forces one to fully examine pros and cons of a choice, as well as alternatives. Unarguably, in the long run, the benefits of obtaining a college and advanced degree will frequently outweigh the consequences of its physical cost. However, taking the time to thoroughly research the end result of obtaining the desired degree, even before beginning, will ensure getting “the bang for their buck.”

Here's what we're doing to combat the problem