Ballooning Student Loan Debt Threatens Our Nation’s Future

Graduation candidates celebrated on May 12 at the Centenary College commencement in Hackettstown, N.J. Courtesy of Associated Press. Retrieved from

By Danny Zeng

In a new report released by the Pew Research Center last Thursday, it has become apparent that student loan debt is now more of a burden to more families than ever. Throughout the 1990s, about one in ten households held educational loan debt. Today, that number has doubled to almost one fifth of households. According to the study, increasing student loan debt hurts the lowest income quintile of households the most. In 2007, as a share of the total household income, student loan debt was 15% for the lowest quintile. By 2010, that percentage had gone up to 24%, partly as result of decreasing income. This creates real financial challenges for low-income families, as student loan debt increasingly takes away greater proportion of their wealth. These households will probably have to repay their student loan debt sacrificing living expenses.

Some highlights from the report:

  • Average student loan debt in 2010 was $26,682. About 10% of indebted households have outstanding debt in excess of $62,000, well beyond the median income in this country.
  • For students attending a four-year public university, the average debt was $22,000
  • Almost half (44%) of the outstanding debt were owned by young people under the age of 35
  • Middle and upper-middle households suffered the most in the student loan crisis, with these groups owning 45% of all debt in 2010. For comparison, the poorest two-fifths owned 24%. The middle-fifth proportion had gone up by three percentage points from 2007 to 2010, from 20% to 23%.

This crisis is happening amidst the fact that real mean household income has decreased. Student loans do help lower income groups get through college; however, it has also become a greater proportion of their household income. The President wanted to “save” the federal student loan rate by maintaining the subsidized Stafford loan at 3.4%, without really care about how to fund the $6.7 billion price tag for a one-year extension, or the fact that the debacle was wholly created by a political compromise back in 2007 under a Democratic congress. His idea about “college affordability” is to simply hand out more government money to beef up the educational-industrial complex. The President needs to live up to what he said in the State of the Union address about keeping colleges across the country accountable to cost and tuition growth.  True affordability requires the nation’s public universities to proactively seek symbiotic relationships with community colleges and for-profit colleges to expand access and reduce cost in real terms. So far, the President’s efforts on this front are scant. More loans and government subsidies are not sustainable solutions to our nation’s higher education problems. We need renewed focus on true access and affordability, and God forbid, quality. It’s time to rock the Ivory Tower and bring more accountability and transparency to higher education because the political and economic future of our country depends on a vibrant higher education ecosystem that is affordable to all.


About Danny Zeng

College student, political junkie, I like to read, and I like to learn

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