Student Loan Debt – Midweek Infographic

We’re all told that a college education is an invaluable commodity and a necessity in today’s world. Because of this, people are willing to pay almost anything for a degree. However, at the current cost, is it worth the value that people place on it? Bill gates didn’t graduate from college and neither did Mark Zuckerberg. I’d consider them pretty successful by today’s standards. Granted, they are exceptions that we can’t all set out to be, but what do people learn in college that somehow places a higher worth on what is taught? Should you choose to go to college and take out a substantial amount of debt because of it?

This week’s infographic takes a look at student debt and some staggering facts that I was not aware of.

The United States of Student Debt

I knew that student loan debt was out of control, but I was shocked by several figures represented in this infographic. For one, I can’t believe that people over the age of 50 still carry balances.  Not only do they have student loan debt, but they make up for a large percentage at roughly 17%.

Also, I’m very surprised by the number of loans with past due balances.  I guess this can attributed to the high unemployment rate that we are faced with today.  College grads are finding it more and more difficult to locate jobs post graduation.

Some economists were able to foresee the tech bubble over a decade ago and the housing bubble that burst recently. Many of these same economists are predicting a student loan bubble that will bring this economy down in much the same manner. Most of the time, student loans cannot be wiped out by filing for bankruptcy, so people will be stuck with these loans forever, job or no job. Students that take out loans should always expect to pay for their obligations and what comes along with them, but the amount you borrow must be relative to the education obtained and what you expect to receive after you graduate.

READERS:  If you don’t mind disclosing, how much do you owe in student loans currently? Do you feel that your education was worth the money used to obtain it? Did you benefit from an inheritance or a custodial account? What can we do about the current rise in education costs?

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Comments

  1. Nathan Duke says:

    That is staggering to say the least, being a recent graduate, I feel blessed to have 0 student loan debt; however, if I were in the same situation as the majority of the country~ $15-30,000 in debt for just my undergrad: I would definitely feel like I’d wasted 4 years of my life.
    With the exception of the high-technology sector, the “blue collar worker” seems to be more in demand than the “white collar worker.”
    Through my countless hours searching for jobs prior to graduation, and the occasional time I spend now, I feel like I would be better paid and more in demand if I had spent 4 years after high school learning about machinery or welding.
    Obviously these aren’t great examples, but to an extent, it seems to be true. I feel like the “college education” is a bubble, not just student loan debt.
    For the last 30 years, a bachelors degree has been the ticket to a nice home in the suburbs and 3 kids in private school; however, I would expect an shift over the next 10 years.
    As people slowly become aware to the concept of opportunity cost, college enrollments should slow to a more modest and sustainable pace. (Never-mind the irony that “opportunity cost” is something taught in ECON 101 in college.)

    Now given that information… there’s gotta be some kind of trade to make there…?

    • Thanks for the great comment Nathan.

      That’s great that you were able to graduate with no sudent loan debt. I feel that most people should fall into that category when combining a part-time job and state assistance programs. Of course, when attending an expensive private school, that will be harder to accomplish.

      It’s true that a lot of people are learning skills outside of college and not just in blue-collar industries. Look at all of the teenagers who are mastering programming before they finish high school. I recently came accross an article about a 14 year old with two highly successful Android and iOS apps.

  2. Wow.. I am amazed as well to hear that there are folks in their 50’s who still have student debt..

    But in analyzing how much money I wlll need to “save” for my 3 kids college funds, the numbers are staggering.

    • They are indeed Jefferson. The IRS needs to raise the amount that you’re able to contribute into an ESA account. The cost of education is growing exponentially, yet the contribution limit has remained at $2000 per year.

  3. You would hate to know how much I owe. I have $38,000 in debt (bachelors and masters) and my husband has $58,000 (masters) and $5000 (bachelors) And, he is now one year into medical school which will set us back about $250,000 total….. It hurts me to add the numbers together, but you totally can. 🙂 Still, we are really budget conscious and are looking into many ways to manage this when he gets out of school.

    This is my first time reading/commenting, and I’m looking forward to more of your posts!
    Best,
    Cat Alford
    aka
    Budget Blonde

    • I have some graduate school loans as well, so don’t feel too bad Cat.

      That is a substantial amount, but also a fantastic area of work. If I could go back 10+ years, I would love to go into medicine. Hopefully, Obamacare won’t negatively impact your husband’s future in medicine. I’ve heard mixed things from medical professionals. What does he think about it?

      Thank you for the read and the comment. I hope to hear from you again.

  4. I don’t mine disclosing at all. We owe nothing (completely debt free). It wasn’t easy, but I was happy to get it done. I definitely was affected by all of the debt. A recent story was just published about this here: http://community.careonecredit.com/b/straight_talk_on_debt/archive/2012/07/14/financial-expert-spotlight-roshawn-watson.aspx
    I definitely appreciate the education, but I should have went about it differently for my budget. Perhaps, I should have considered a cheaper alternative for school. There were public universities that had great rankings that I was accepted into. I also had a better package at another private school that I was accepted into. That said, I do not regret my decision to go to my school I probably should have worked more.

    • I went through a similar thought process when deciding which graduate school to attend Roshawn. I ended up choosing the less expensive public university and saved myself 75% of the total cost. At times though, I wonder if I should have choosen the more expensive school with a more challenging curriculum. The grass always looks greener on the other side I suppose.

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