The class of 2012 have not only earned their college degrees, they also earned the dubious distinction of having the most student loan debt ever. The average debt held by each graduate in 2012 was $29,400, besting the debt amount of 2011 graduates which was $26,600. The Institute for College Access & Success’ Project on Student Debt released the numbers and said that student loan debt has risen at an average rate of 6% per year from 2008 through 2012. Seven in ten seniors graduated with student loan debt. 69% of Ohio students graduated with student loans, averaging $29,037 in debt.
To make matters worse, the job market is still poor for recent graduates, leaving many college graduates with little to no income upon graduation.
What may be most disheartening is that researchers are just learning the impact student loans can have on a graduate for the rest of their lives. While it is true that college graduates have higher lifetime earnings on average than non-graduates, those who graduate without any student loan debt are in a much better position than those with student loan debt. A new study by the public policy institute Demos has determined that education debt of $53,000 will lead to a $208,000 lifetime loss of wealth. If current student borrowing trends continue, student debt will reach $2 trillion by 2025. The study found that $1 trillion in outstanding student debt will lead to a total lifetime loss of $4 trillion for affected households.
- Average student loan debt: $29,400 (wtkr.com)
- Are your student loans keeping you from starting a business? (hiscoxusa.com)
- Have We Been Set Up For Financial Failure? (Infographic) (lexingtonlaw.com)