US College Graduate Debt
Approximately 44 million Americans have total student debt exceeding $1.6 trillion. And these numbers continue to grow. Simultaneously, advances in technology, particularly advanced automation, make it difficult for people without advanced levels to earn a living wage. Today, the average income of US college graduate debt is 80% higher than that of graduates with only a high school diploma.
Specialists have long referred to this dynamic as a “disaster.” But then another crisis broke out. This is a coronavirus pandemic. The economic crisis continues. In February, the United States formally move into a downturn. From mid-March to June, more than 42.6 million Americans applied for unemployment.
During the 2008 downturn, many people chose to return to school to learn new talents. But since then, the expense of a four-year bachelor’s degree has risen by 25%, US college graduate debt has grown by 107%, and many people are not sure whether universities will be the way out of this recession.
CNBC Make It discussed with students, historians, borrowers, and professionals the risks of student debt and how the epidemic affects borrowers and investigates who is responsible for putting students in difficult positions.
The History Of US College Graduate Debt:
David Deming, professor of the public at the Harvard Kennedy School and Harvard Graduate School of Education, said that today, the number of enrolments in American universities had exceeded 20 million, but “the foundation of the modern higher education system began more than 100 years ago, a long time ago.” “The real establishment of higher education was around 1890 to 1940, and universities began to be more than just careers for schools participating in religious education and a few wealthy people.”
The Intersectional Impacts of Student Debt
However, not all graduates feel the same about student debt. Nicole Smith is the chief economist of the Education Labour Centre at Georgetown University. She studies how education and debt affect worker performance and how some Americans make healthier deals than others.
She said: “People who went to school in the 1970s and 1960s paid college tuition when they were working. They will get a summer job and pay the schooling.” “When they graduate, they have no debt, or just spend a few hundred or a few thousand dollars, and they can pay the money in a few years and continue to live.”
These Days, more than 30% of student loan mortgagors default on debt, default on loans or have stopped paying for six years after graduation. Smith also pointed out that student debt prevents some borrowers from building intergenerational prosperity, thereby aggravating the current racial gap between rich and poor.
The average borrower of white student loans is indebted about $30,000 in student debt. Black borrowers borrow nearly $34,000 on average. The annual rate of repayment of school debt for white borrowers is 10%, and that for black borrowers is 4%. Part of the reason is the significant wage gap between races.
She said: “To build intergenerational wealth, many of them are tied to the homeowner and have the capability to purchase and hold a house. If you have too much student loan debt, you can save enough money for your down payment. The average wealth of black families is 1/13 of that of white families. Negative wealth is now the potential wealth for repaying loans, which could have been used to save money, buy a house or invest in the stock market to accumulate wealth.”
These changing aspects keep black families from accumulating wealth and protecting to send future children to go to college, thereby further promoting this cycle. In addition, Smith said, the impact of US college graduate debt on women is particularly severe, explaining the “worst-case” inequality.
According to the American Association of University Women (AAUW), about 56% of college students are women. Still, women account for about two-thirds of American student debt, according to the American Association of University Women (AAUW). As of 2019, women’s outstanding student debt is close to $929 billion.
She said: “Women with master’s degrees do on average whatsoever a man does with a bachelor’s degree, and a woman with a bachelor’s degree would make it to on average what a man with an associate’s degree makes.” “Therefore, more and more women choose loans when repaying these loans. And their repayment ability is affected by lower wages.”
How students are impacted?
The most concerning side effect of the student debt disaster is delaying the traditional adult indicators of borrowers. According to the survey, 21% of debtors postponed marriage, 26% refused to have children, and 36% postponed buying a house. However, student debt has a considerable influence on the daily lives of today’s college students. This includes decisions about where and what to learn, as well as psychological health.
“I have student debt, which is one of the grounds why I don’t even like to be a student here because I have to be concerned if I have enough money to go to school every semester and next semester. ” The Columbia University student told CNBC Get it. “I will have to enter the army or marry a rich man, so I’m likely to join the army.” Columbia University’s sticker fee is $83,293 (tuition, miscellaneous, board, and lodging, meals), which are the average prices for Columbia students. Eligible financial aid is approximately US$23,000.
“I attended the University of Maryland. Because this is a public school, it is much cheaper, but I like it, so I decided to go back to Columbia,” another student said. “If I didn’t study computer science or anything else, I should be a graduate student. I wouldn’t come here.” The University of Maryland Parker’s fees totaled $28,479, and the average price for assisting eligible students is close to $ 18,000.
Student debt in the era of COVID-19
The coronavirus epidemic has closed universities and pushed millions of students to attend classes online. Most universities are still considering whether to teach directly in the next semester. But some students consider whether the new teaching experience is worthwhile. Several students throughout the country sued schools for repayment. And the government has approved a $2 trillion economic stimulus plan, which includes a six-month student debt repayment period.