The student loan debt crisis continues to remain a sore eye for students
around the country.
While many have proposed ideas to combat the crisis, students continue
to bear the brunt of the growing crisis. Over the last decade, the total
amount of student debt has nearly doubled to $1.19 trillion dollars, with
7 million borrowers in default. While undergraduates are capped at $57,500
in federal loans (with only 2% of undergraduate student borrowing above
$50,000), not all students are not bound by that borrowing cap, with many
graduate students borrowing in excess of $100,000. The average law student
owes $140,000 at the time of graduation, while the average medical student
Interestingly enough, those students with less overall student debt are
more likely to end up in default, according to a new study by the Federal
Reserve Bank of New York. Those who owe between $1,000 and $5,000 in federal
student loans have defaulted on their obligation 34% of the time, compared
to those with over $100,000 who default 18% of the time. Logically, it
makes some sense, since graduate level students are more likely to obtain
higher paying jobs.
As a result, many of those who have only obtained an undergraduate degree
are less likely to live independently of their families. A new report
by the Pew Research Center concluded that 43% of undergraduate students
continue to live at home after graduation, which is an increase of 4%
compared to statistics over the prior decade. If the crisis is not resolved,
the ramifications will continue to stifle struggling students and can
have an impact on our overall economy.