Student loan debt has surpassed total credit card debt in the U.S. This year’s graduating class of college seniors had the highest average debt to date, and that total amount is projected to reach more than $1 trillion later this year.
Student debt has been on the rise since 2008, but during that same time period credit-card debt dropped. More students have needed to borrow, as the cost of both tuition and the price of everyday goods and services have risen. When compared to student debt rates from over a decade ago, the current rate is up by 47 percent, taking inflation into account.
Despite the increasing debt load on recent grads, it would be overly simplistic to call higher education a bad investment, however. In an interview broadcast on National Public Radio today, the founder of Project on Student Debt, Lauren Asher, that job prospects increase greatly with a higher degree. College graduates are more likely to get a job over someone with just a high school diploma, and a better paying job at that. On average, an Associates degree means 30 percent higher income over someone with just a high school diploma, and a Bachelor’s degree equals about 75 percent more.
College seniors who graduated in 2009 carried an average of $24,000 in student loan debt, according to the nonprofit organization Project on Student Debt. Meanwhile, unemployment for recent college graduates climbed from 5.8% in 2008 to 8.7% in 2009 - the highest annual rate on record for college graduates aged 20 to 24.
The Project on Student Debt offers some advice for recent graduates grappling with debt. Here are just a few from the top ten tips:
- Know your loans and your grace period.
- Lower your principal, if you can.
- Pay off the most expensive loan first.
- Consider the pros and cons of consolidating your student loans.
College Student Debt Grows. Is It Worth It? [National Public Radio]
Student loan debt to reach $1 trillion [Metro]
Number of the Week: Class of 2011, Most Indebted Ever [Wall Street Journal]