BorrowStudent LoansThe Long Road to the Student Loan Debt Crisis

The Long Road to the Student Loan Debt Crisis

The Student Loan Debt crisis is growing and interest rates on these loans continue to rise. We discuss if your degree worth the excess of debt you incur.

Ad Disclosure: This article contains references to products from our partners. We may receive compensation if you apply or shop through links in our content. You help support Smarts by using our links.

Analysis of the recent Department of Education (DOE) data shows that only 56% of borrowers are paying back their student loans, while 32% of borrowers are either postponing payment or not paying at all. Experian analyzed data from the Department of Education (DOE) to see how borrowers are managing their student loan debt.

 Here are some of the findings:

  • $722 billion (56%) is in repayment as of Q3 2019.
  • $127 billion (9.8%) is currently in deferment.
  • $129 billion (10%) is currently in forbearance.
  • $155 billion (12%) is currently in default.
  • 8.8% of people with student loan debt are still in school.

The student loan debt crisis is growing and interest rates on these loans continue to rise. Is your degree worth the excess of student loan debt you incur?

I feel for those with high student loan debt sometimes reaching close to $100,000. We all know that one person was sold the college dream and have $80,00-$100,000 in loans and now working jobs that don’t even utilize their prestigious degrees.

Crippling student loan debt is a serious problem; Americans owed nearly US $1.6 trillion in student loan debt as of October 2019, more than three times the amount of debt from just a decade ago.

Student Loan Statistics (Source Forbes):

  • Total Student Loan Debt: $1.52 trillion
  • Total U.S. Borrowers With Student Loan Debt: 44.2 million
  • Student Loan Delinquency Or Default Rate: 10.7% (90+ days delinquent)
  • Total Increase In Student Loan Debt In Most Recent Quarter: $29 billion
  • New Delinquent Balances (30+ days): $32.6 billion

And the states with the most debt are staggering:

Source: EducationData

What’s the Real Return on Your Student Loan Debt?

In this country, it is ingrained in our brains at a very young age that it is either university or you will be working at McDonald’s. Generations before us, or our parent’s generations, there were jobs all over the board to be had.

Return on this college degree investment, back when our parents graduated made it a worthwhile endeavor. Now there are more college graduates than employment opportunities in every industry.

BLS predicts that between 2012 and 2022, the U.S. will see a net increase of 15,628,000 jobs. But of that number, only 4,230,500 will require a minimum of a college degree. Crippling student loans would only be worthwhile if you make sure you have a job offer lined up after college. Private student loan companies hand out loans to anyone with a pulse, and interest rates are more than 4%.

These rates increase year after year, not to mention that colleges and universities increase tuition 6% year after year. Tuitions have risen across the board 1000% by 1978. Colleges offer a multitude of majors with virtually no employable opportunities, colleges offer new editions textbooks every semester just to take more money out of your pocket.

Higher education has become one of the most profitable business models in the country. The fact that everyone is basically entitled a student loan, some of which do not have the ability to pay after college remains me of the subprime mortgage crisis. This is basically the way it is designed, the trillion-dollar debt is all by design. The majority of college students graduating are enslaved to their debts, being forced to postpone a costly wedding, buying a home, and children.

Got Student Loans? You Have Options

The silver lining to this story is that more millennials are pursuing higher education, even if they are taking out loans to do so. Some economists are troubled by the fact that fewer people under 30 are buying homes and other goods as more are paying for college, but higher education is, on the whole, a solid place to put your money.

In 2017, the median earnings for young adults with bachelor’s degrees were 50 percent higher than those of their counterparts with high school diplomas. But for many members of Generation Debt, the benefits of having a diploma may seem a long way off.

If you want to learn more about your student loan options, here are some good student loan resources to consider:

Check your rate without a hard credit check
College Ave Student Loans
4.5

College Ave offers private student loans with multiple repayment options. Apply online in 3 minutes and get an instant credit decision. No application, origination, or disbursement fees.

Pros:
  • Min credit score: Mid 600s
  • Fixed APR: 3.24-13.59%
  • Variable APR: 0.94-12.99%
VIEW RATES
Brian Meiggs
Brian Meiggs
Founder of Smarts, Brian is an entrepreneur and investor who enjoys working out, reading, spending time with his family and friends, playing chess, traveling and creating great content. He’s passionate about helping others make smarter money moves and achieve financial freedom. He uses the free Personal Capital app to manage his cash flow and net worth.