So you still doubt that student loan debt is a problem? A new report from the Institute for College Access and Success (TICAS) might just convince you otherwise. According to the TICAS' 10th annual report, "Student Debt and the Class of 2014," student loan debt for that year's college graduates averaged nearly $29,000 per student, the highest level yet — much higher than 10 years ago and a 2 percent increase over 2013.
What's more, these debts are not isolated to a small segment of college graduates. TICAS reported that 69 percent of graduating seniors — that's nearly 7 in 10 — had student loan debt. And the problem isn't something that can be laid at the door of for-profit online colleges who pocket millions in tuition but produce graduates with dubious credentials and limited marketability. Such schools seldom report their graduates' average debt. No, the debt figures reported by TICAS are for the nation's public and nonprofit private colleges, which still award more than 90 percent of four-year degrees.
Student debt loads vary widely by state. Delaware, New Hampshire, and Pennsylvania had the highest debt levels, with student debt averaging more than $33,000 in these states. Utah, New Mexico, and Nevada had the lowest debt levels, ranging from just under $19,000 in Utah and New Mexico to just over $20,000 in Nevada.
TICAS concludes that students are leaving college not only with diplomas, but with far greater debt burdens than they did 10 years ago. "Student debt has rightly become a major policy issue," said TICAS President Lauren Asher. "Students and families need better information and better policies to make college more affordable and debt less burdensome."
The implications of these high debt levels are serious. Some analysts fear that student debt may slow an already fragile economic recovery. There are indications that many young professionals are postponing marriage and buying homes because of struggles to make student loan payments. What's more, debt loads continue to rise.
Some of the nation's leading higher education funders are convinced of the need to do something about student debt and the cost of higher education. A coalition of leading foundations, including the Ford, Gates, Kresge, Gilbert, and Lumina foundations, have funded TICAS and its research into student debt levels. They also have advocated for national policy action to reduce student debt.
Most of the proposed policy actions have focused on student debts shouldered by low-income students. Ford's Higher Education for Social Justice initiative emphasizes that student debt loads are spread unevenly, with greater burdens shouldered by students from low-income and ethnic minority families. Similarly, Lumina advocates greater support for low-income and first-generation students to reduce student loan debts.
The problem may also become a key issue in the upcoming presidential election. Both Democratic candidates have included proposals to reduce student debt and the cost of college in their stump speeches. Former Secretary of State Hillary Clinton favors billions in federal spending to cut interest rates and create a fund for low-income students. Her rival, Vermont Senator Bernie Sanders, goes further: He advocates making U.S. higher education free for all students, a plan he proposes to pay for through a transaction tax on Wall Street trades.
Pols and funders will continue to make speeches, fund reports, and advocate policy changes, but so far, no proposals appear likely to become law in the forseeable future. Congressional Republicans are certain to oppose any plan that involves higher spending or an increase in taxes.
Meanwhile, student debt levels continue to rise, prompting some to wonder if student loans will be the next "housing bubble."