The Scariest Student Loan Number

Source: Derek Thompson, The Atlantic, July 19, 2016

Some focus on the largest figures, like total student debt ($1.3 trillion) and average debt ($30,000.) So why is the most dangerous student loan number less than $5,000? ….

…..Loans of $10,000 account for two-thirds of all defaults. This is particularly tragic, because these debt-without-degree adults chased the American dream into a dead end. Almost all of the evidence available to economists suggests that college graduates are more likely to be employed and make more money than non-grads…..

Investing in Higher Education: Benefits, Challenges and the State of Student Debt
Source: White House Council of Economic Advisers, July 2016

Higher education is one of the most important investments individuals can make for themselves and for our country. Many students access student loans to help finance their education, and last year federal student loans helped 9 million Americans to make that investment in their futures. Typically, that investment pays off, with bachelor’s degree recipients earning $1 million more in their lifetime and associate’s degree recipients earning $360,000 more, compared to high school graduates. Society also benefits from these investments through such mechanisms as higher tax revenues, improvements in health, higher rates of volunteering and voting, and lower levels of criminal behavior.

At the same time too many Americans feel that college may be financially out of reach and are concerned about rising student loan debt. Student loan debt can be especially burdensome for those who do not graduate or who attend schools that do not deliver a quality education. However, unmanageable debt is not the only issue facing current and former students. Some individuals who could benefit from a high quality postsecondary education do not apply and enroll in college, under-investing in education and shortchanging their future…..