Record-Level College Debt Means It's Time for New Approach
Students are Borrowing More, Earning Less
(Washington, D.C.) – According to data from the National Center for Education Statistics, the class of 2014 will graduate as the most heavily indebted in history – with an average of $33,000 to pay back. And while students are going deeper into debt, they are seeing their wages decline. Between 2005 and 2012, the average student loan debt climbed by 35 percent – while the median salary fell by 2.2 percent. Furthermore, more and more students are borrowing to pay for college. In 1993, about 45 percent of graduates had taken out student loans. Now that number is up to 70 percent.
While the Obama Administration and leaders in Washington have pushed to expand student lending in the hopes of making college more affordable, the main result of this effort appears to be far greater student indebtedness. Instead of reducing the cost of higher education, students are simply borrowing far more in order to pay for a degree.
Daniel Garza, Executive Director of The LIBRE Initiative, released the following statement:
"Washington needs to reconsider the best way to help ensure young people have access to higher education. The answer can't be just to encourage students to borrow more and inflate the cost of a degree that may not provide returns in this very difficult economy. That makes them worse off, not better off – as they are stuck paying off debt rather than establishing a household and starting a career.
Instead, we should be focused on improving the economy to generate job opportunities for these students and helping them make sound financial decisions- rather than imposing a costly and unaffordable burden they will be paying off for years. What Washington is doing just isn't working. It's time to work together on a new approach."