Congratulations to Class of 2014, Most Indebted EverPosted: May 25, 2014
As college graduates in the Class of 2014 prepare to shift their tassels and accept their diplomas, they leave school with one discouraging distinction: They’re the most indebted class ever.
The average Class of 2014 graduate with student-loan debt has to pay back some $33,000, according to an analysis of government data by Mark Kantrowitz, publisher at Edvisors, a group of web sites about planning and paying for college. Even after adjusting for inflation that’s nearly double the amount borrowers had to pay back 20 years ago.
Meanwhile, a greater share of students is taking on debt to finance higher education. A little over 70% of this year’s bachelor’s degree recipients are leaving school with student loans, up from less than half of graduates in the Class of 1994.
The good news for the Class of 2014 is that they likely won’t hold the title of “Most Indebted Ever” very long. Just as they took it over from the Class of 2013, the Class of 2015 will probably take it from them.
But as the debt burden of college graduates continues to rise faster than inflation, it begins to complicate the question of whether a bachelor’s degree is worth the expense. So far, that answer is a firm “yes.” College graduates have a lower unemployment rate and make more money than their contemporaries without a degree. Of course, some majors pay more than others, but in just about every industry workers with college diplomas are paid more than their counterparts without one. And the more education a person has, the greater the pay advantage becomes. (Although, that also often means more loans. “About 15% of graduate and professional school students graduate with six‐figure student loan debt, compared with only 0.3% of undergraduate students,” Mr. Kantrowitz says.)
But will the debt associated with a college degree always be worth it? That’s a little less clear. “A good rule of thumb is that undergraduate and graduate students should borrow no more for their entire education than their expected salary at graduation,” Mr. Kantrowitz says. For the average borrower, that’s still a pretty good bet right now. Granted, not everyone has the same debt, and not everyone gets a job at graduation. But if we compare student debt for young college graduates and salaries for young people with degrees, we can get a sense of where we stand…(read more)
- Net Worth Of College Grads With Student Debt Is 20% Less Than High School Grads With No Debt (zerohedge.com)
- College grads of 2014 are the most indebted ever (krdo.com)
- New Grads Are Most Indebted Ever – But It’s Not Just Student Loans (tomfernandez28.com)
- New Grads Are Most Indebted Ever — But It’s Not Just Student Loans (heritage.org)
- thinksquad: As college graduates in the Class of 2014 prepare… (priceofliberty.tumblr.com)