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I definitely agree that rapidly rising education costs are a huge issue and need to be addressed. However, most (67%) undergraduate student loan amounts are for

I definitely agree that rapidly rising education costs are a huge issue and need to be addressed. However, most (67%) undergraduate student loan amounts are for less than 20K[1] At 6.8% interest and 10 year repayment that comes to about $2,761 per year, with interest that can be paid with pre-tax money. Yes, thats a hefty amount to many, but earnings with a college degree are still much more than enough to offset that burden. Furthermore, 42% are for less than 10k. The student loan debt crisis doesn't seem like all doom and gloom just yet. [1] https://trends.collegeboard.org/student-aid/figures-tables/distribution-borrowers-average-balance-2015 https://trends.collegeboard.org/student-aid/figures-tables/d... Yes its from 2015, but I can't imagine the distribution has changed so much that it is irrelevant. According to Wikipedia, 39.9% owed less than 10k in 2012 [2]. https://en.wikipedia.org/wiki/Student_loan_default_in_the_United_States#/media/File:U.S._Student_Loan_Debt_Distribution_Q4_2012.png https://en.wikipedia.org/wiki/Student_loan_default_in_the_Un...

lr4444lr 9y ago
What's worrying is that the underlying asset that will eventually pay off this debt (wage growth due to increased productivity this education is supposed to confer) has been stagnating or growing a lot more slowly than the cost of college.
moduspol 9y ago
I may be missing something, but I don't see anything in either of those figures that rules out people who leave school after one or two semesters, or otherwise don't graduate for some reason. Maybe that's intended, but I feel like it'd be useful to include the average amount of debt of students who graduate. For my state (PA), it's at almost $35k, but only 71% of them have any debt at all [1]. That means that $35k is calculated with 29% of the values being zeroes. My degree wasn't in math, but I think that means that if you graduated with any debt at all in PA, you've likely got $50k or more. Does that mean it's a bubble? I don't know. I do know when I was an employee of a private university in PA, we were told year after year of 4% tuition hikes while being told we should be patting ourselves on the back because it's below the national average. That definitely sounds unsustainable, but so far it's been working out pretty well for colleges. [1] http://ticas.org/posd/map-state-data#overlay=posd/state_data/2016/pa http://ticas.org/posd/map-state-data#overlay=posd/state_data...
jellicle 9y ago
That's a snapshot in time. Yes, some people who have been out of college for twenty years have paid their debt down to less than $10K. Also, a sizeable percentage of homeowners have mortgages of less than $10K, at this instant. But both student borrowers and homeowners started off with more debt. You're assuming they're graduating with $10K debt. Actual average debt at graduation is $37K.
- ProfessorLayton 9y ago
  That 37k average is distorted by graduate and professional degrees [1], which is why I specifically referred to undergraduate debt, which are the bulk of all graduates. [1] https://static.newamerica.org/attachments/750-the-graduate-student-debt-review/GradStudentDebtReview-Delisle-Final.pdf https://static.newamerica.org/attachments/750-the-graduate-s...

lr4444lr 9y ago

What's worrying is that the underlying asset that will eventually pay off this debt (wage growth due to increased productivity this education is supposed to confer) has been stagnating or growing a lot more slowly than the cost of college.

moduspol 9y ago

I may be missing something, but I don't see anything in either of those figures that rules out people who leave school after one or two semesters, or otherwise don't graduate for some reason. Maybe that's intended, but I feel like it'd be useful to include the average amount of debt of students who graduate. For my state (PA), it's at almost $35k, but only 71% of them have any debt at all [1]. That means that $35k is calculated with 29% of the values being zeroes. My degree wasn't in math, but I think that means that if you graduated with any debt at all in PA, you've likely got $50k or more. Does that mean it's a bubble? I don't know. I do know when I was an employee of a private university in PA, we were told year after year of 4% tuition hikes while being told we should be patting ourselves on the back because it's below the national average. That definitely sounds unsustainable, but so far it's been working out pretty well for colleges. [1] http://ticas.org/posd/map-state-data#overlay=posd/state_data/2016/pa http://ticas.org/posd/map-state-data#overlay=posd/state_data...

jellicle 9y ago

That's a snapshot in time. Yes, some people who have been out of college for twenty years have paid their debt down to less than $10K. Also, a sizeable percentage of homeowners have mortgages of less than $10K, at this instant. But both student borrowers and homeowners started off with more debt. You're assuming they're graduating with $10K debt. Actual average debt at graduation is $37K.

ProfessorLayton 9y ago
That 37k average is distorted by graduate and professional degrees [1], which is why I specifically referred to undergraduate debt, which are the bulk of all graduates. [1] https://static.newamerica.org/attachments/750-the-graduate-student-debt-review/GradStudentDebtReview-Delisle-Final.pdf https://static.newamerica.org/attachments/750-the-graduate-s...