Student loan debt is on the rise, according to a new report released Tuesday by the New America Foundation. Student loan debt is now a little more than $1 trillion, outpacing all other loans except mortgages. This number is much higher than years past, and much of the debt is from students who went to university for a graduate degree. New research has indicated that students who went to university for a graduate degree borrowed $57,600 in 2012, a 43% increase from 2004.
The jump in graduate school borrowing is a large surprise to researchers, and it highlights the disproportionate borrowing for grad school amidst a weak economy. Many students leave school unable to find work despite their degree, so they go back to graduate school. However, with little federal help, students end up taking out a lot of loans that they may not be able to pay back. And with so many people getting masters, there is no guarantee that they will be able to secure a better job after grad school.
This is an increasing concern for policy makers and student advocates because higher levels of education should equal higher wages and a more stable economy. However, students who leave school with high debt may end up falling behind on their payments, damaging their credit, and limiting purchases of homes, cards, and other items that drive economic growth.
Source: Wall Street Journal
