How Does Your Student Loan Debt Compare To Your Parents?
The price tag for tuition has seen staggering increases over the years.
The next time a baby boomer tries to give you shit about your finances, tell him to hold it right there. In addition to sundry factors that contribute to the shifting financial situation of millennials (about which the media *loves* to snark), there’s a very large, alarming, and somewhat basic reason this generation is having trouble with money:
College is astronomically more expensive than it used to be.
According reports from the Federal Reserve, there are 12 million student loan borrowers between the ages of 30 and 39, and collectively, they’re holding $408.4 billion in debt, which works out to approximately $34,033 per person. Or, to frame it in a way that'd be relatable to our parents' generation: About the same as the average house in 1973.
For the younger generation who've graduated more recently or is still in school, the numbers aren’t much prettier: There are 17 million individuals in their twenties that hold $376.3 billion in debt, and this works out to $22,135. It’s worth noting, too, that a portion of this group are yet to pursue secondary degrees, which adds significantly to loan debt.
This is heady news not only for the individual saddled with debt the size of Scrooge McDuck’s money pool, but for the economy at large: The rate of borrowers who are presently in default or are 90 days past due is approaching 40 percent.
While there are a number of contributing factors, exponential increases in tuition is, of course, a major player.
For the 2016-2017 school year, the College Board reported that the average cost for a year at a “moderate” college was $24,610. For a private college, the cost averaged $49,320.
Contrast that with the prices from 30 years ago, according to data records of the National Center for Education Statistics: For the 1986-1987 school year, the average cost for room, tuition and board and a four-year public university was $4,469, and for a private university it averaged $12,278.
Adjusted for inflation in today’s market, four years at a public school in the late ‘80s would be the equivalent to $9,786.42 and for private school, it would be $26,886.92.
Add to that the fact that a bachelor’s degree went a lot farther in terms of the job market back in the day, and the notion that this generation feels increasing pressure to pursue an advanced degree in order to remain competitive, and it certainly looks like millennials are getting the short end of the shrift on this one.
The cherry on top? Under the Trump administration, zero student-loan forgiveness applications for students who were defrauded by institutions have been processed. Zero. Now might be a good time to let your representatives know what your thoughts are on the untenable state of the cost of education.
Words: Deena Drewis