The rising cost of a college education and the failure of federal grants to keep pace has led to average student loan debt hitting an all-time high.
The class of 2010 not only faced one of the toughest job markets in recent memory, but an estimated two-thirds of them are saddled with an average student loan burden of $25,250. Average student debt for the class of 2009 was $24,000.
"More people in this country have student loans and they owe more than ever before," said Lauren Asher, president of the Institute for College Access and Success in Oakland, Calif.
A report released this month by the Project on Student Debt at the Institute for College Access and Success found that average debt for the graduating class of 2010 ranged from $950 to $55,250 at the individual schools that reported student loan data. Anywhere from 2 percent to 100 percent of the students who graduated from those individual colleges had educational loans.
Mark Kantrowitz, publisher of the student financial aid websites Finaid.org and Fastweb.com, said the increase in student debt is linked to rising tuition and a decline in federal student grants. "Also, federal and state governments have been cutting their support of post-secondary education."
Kantrowitz added that he believes "we are headed for a severe decline in college affordability."
Student debt has become a fact of life for more Americans, and it tops the agenda of some in the Occupy Wall Street movement.
Many activists camped out in Pittsburgh's Mellon Park, for instance, have signed a cardboard display listing the total amount of their student debt. One of group's main proposals is the wholesale forgiveness of all student debt.
President Barack Obama recently unveiled a program meant to make college more affordable by helping current college students not only consolidate student loans, but lower their monthly payments and reduce the time frame for loan forgiveness.
The plan allows graduates to pay 10 percent of their discretionary income instead of 15 percent toward federal student loan repayment. Also, federal education loans will be forgiven after 20 years instead of 25 years of repayment.
A major criticism of the Obama program is that it will help current students who take out federal educational loans beginning in 2012, but it offers no relief for millions of people already struggling to make their student loan payments.
It also does not address the growing number of graduates saddled with private student debt, which offers borrowers far less flexibility with payments, deferments and forebearances.
Meanwhile, Rep. Steve Cohen, D-Tenn., has introduced a bill in the House of Representatives that would enable those with private student loans to discharge them in bankruptcy.
Unlike other forms of debt such as mortgages and credit cards, it is almost impossible to declare bankruptcy with private student loans. Graduates with high levels of student debt could likely be stuck with that burden for life.
"You are more likely to die of cancer or get killed in a car wreck than get your student loans discharged in bankruptcy," Kantrowitz said.
The ICAS report, titled "Student Debt and the Class of 2010," focuses on graduates of public and private nonprofit four-year colleges who had federal and/or private student loans. The data do not include private for-profit colleges because so few of these schools provided the necessary information.
(Contact Tim Grant at tgrant@post-gazette.com.)
(Distributed by Scripps Howard News Service, www.scrippsnews.com.)
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