Rising Outstanding Student Debt

Apr 23, 2018
Student loans

Student Debt

During the 2008 housing crisis, a minority of borrowers were responsible for the majority of the country’s outstanding mortgage debt. Now, the same patterns are happening with student debt: students with over $50,000 in loans make up more than half of the country’s outstanding student debt.

Which students are taking out the most loans? In many cases, it’s graduate school students. In theory, these borrowers have higher earning potential and are more likely to pay back their debt. However, a new study from economists Adam Looney and Constantine Yannelis shows that this may not be the case.

Five years after graduating, one-third of graduate students hadn’t paid down any of their debt. For students with an undergraduate degree, the number was over half. Even when graduates have multiple degrees, they struggle to pay back their loans.

There are explanations for why some of these students cannot pay back their loans. For medical school students, salaries start low right after graduation but get higher with time. For students in the social sciences, the impact of their work on society may take precedence over salary. Although there are reasons that students cannot pay back their student debt, there are still major implications for borrowers. In order for the United States to succeed, it must find a better way to tackle the student debt crisis.

About the Author

Sabrina Kite

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