Just the Facts

Five Facts on the Student Debt Crisis

By Emma Petasis
April 25, 2019 | Blog

Student debt is an issue that affects many Americans and has been one of the topics both sides of the aisle are talking about. Here are the facts.

1. One in five American adults have student loan debt.

In a report by the Federal Reserve Bank of New York, it was found that in 2018, 44.7 million adult Americans have student loan debt, totaling $1.47 trillion in 2018,[1]which has soared in the last decade alone.

2. The amount students owe varies. 

Depending on education level and income, the amount a student will owe can vary considerably. The average amount owed by a bachelor’s degree holder is $25,000 while a post-graduate degree holder owes an average of $45,000.[2]Additionally, in a study by the National Center for Education Statistics, America has quadrupled the number of master’s degrees earned since 1970.[3]


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3. Borrowing capability is essentially unlimited.

Unlike other consumer loans or credit cards, students have almost an unlimited borrowing capability. There are no credit checking and ability to pay is not examined prior to approving a loan.[4]While there are no limits, the federal government does place a max limit of $57,500 that spans over four years for undergraduate students.[5]

4. The Department of Education has released two new proposals to solve the student loan issue. 

President Trump has not spent a lot of time yet on the student debt issue, but the Department of Education headed by Betsy Devos, has released two proposals. The first address the repayment process of federal loans, which would be income-driven over the span of ten years at 12.5% and could be forgiven after 15 years of repayment. The second would address the borrowing process and cap the amount available to borrow for both undergraduate and graduate students.[6]As of now, both proposals are being considered. 

5. Both Democrats and Republicans agree that there is a student loan debt crisis.

As of now, President Trump and his advisors are focusing on future lending and repayments. The current 2020 Democratic field mostly wants to address current borrowing and the elimination of existing debt. For example, Sen. Elizabeth Warren (D-MA) recently made headlines as she proposed to eliminate (up to $50,000 of) the debt of each person and making all public colleges tuition-free.[7]








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