By Erin Delmore
Student loan debt is plaguing more people than ever before, according to a new study conducted by the George Washington University School of Business. In just 10 years, the number of people dealing with debt has doubled.
“The price of education has gone up. In fact, it has gone up faster than inflation and wage growth,” said Dr. Annamaria Lusardi of the Global Financial Literacy Excellence Center at George Washington University School of Business.
A record 43 million Americans owe more than a trillion dollars in outstanding student debt. That sum’s increased five-fold since 2003. More than a third of borrowers are late with their payments and more than half regret their borrowing.
“I think it’s a part of literacy, not knowing the loans that you’re signing on for, not understanding how the interest rate accrues, not understanding that you’ll end up paying more than you’re actually borrowing,” said Giancarlo Tello, a master’s student at Rowan University and student representative at the College Affordability Study Commission.
New Jersey students rank ninth in the nation. The average borrower carries more than $30,000 in debt. Nearly two-thirds of students in the Garden State have loans, and that right there is the good news.
“The rate’s actually gone down. It was 70 percent two years ago. It was 68 percent last year and the most recent class of 2015, the data that we’ve received indicate that 66 percent of the students — and this is the whole graduating class, public and private institutions in New Jersey,” said New Jersey Association of State Colleges and Universities Executive Director Michael Klein.
At Rutgers University in New Brunswick, nearly 60 percent of students graduate with debt hovering around $25,000, according to a study by LendEDU, a consolidation and refinancing service. It’s closer to 50 percent at Rutgers-Newark, above 70 percent at Rutgers-Camden. At Rowan, Kean and Stockton universities, three-quarters of the graduating class has student debt, similar to Stevens Institute of Technology, Monmouth University and Rider University on the private side. Nearly all students at Bloomfield College — 95 percent — graduated with debt. Just 16 percent at Princeton University.
“What’s really driving the cost of higher ed, certainly in the public sector, has been the decrease in public support for our institutions from the state,” Klein said.
A disproportionate share of students who default on their debt owe $5,000 or less. The heaviest burden falls on those who don’t complete their degrees.
“While we’re seeing graduates who can no longer afford to buy a home or a car, still living with their parents and that their parents are incurring some of that debt,” Tello said.
We know the vast majority of student loan debt is carried by young people. That includes graduate students, undergrads and people in pre-professional programs. But experts say it would be beneficial to break down the data to figure out who, exactly, is taking on the most debt and how best to support them.