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Tipsheet

Class of 2014 Graduates with Highest Student Loan Debt Ever Recorded

College graduates this year face an average student loan debt of more than $30,000 dollars — the highest amount yet recorded. This burden grows larger each year creating a dangerous trajectory for the future of higher education.

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There is additionally an inverse relationship between the cost of college and the salary of college graduates, the Wall Street Journal reports:

The problem developing is that earnings and debt aren’t moving in the same direction. From 2005 to 2012, average student loan debt has jumped 35%, adjusting for inflation, while the median salary has actually dropped by 2.2%. If that continues debt burdens could start to become more unwieldy.


Almost 70 percent of a 25-year-old’s debt is consumed by student loans, according to Liberty Street Economics. This is making it difficult for college graduates to engage in post-school economic activities, such as buying a home.

In today’s economy, college loans are being decreasingly seen as “good debt,” and increasingly acknowledged as toxic, writes Glenn Reynolds in his book “The New School.” He suggests the best result could be the burst of tradition higher education for more learning intensive and economically sound options such as online degrees or trade schools.

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“Bubbles form when too many people expect values to go up forever. Bubbles burst when there are no longer enough excessively optimistic and ignorant folks to fuel them. And there are signs that this is beginning to happen already where education is concerned.”

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