Student debt in America is growing at a slower pace, however borrowing is an integral part of living for most students. According to an analysis, the average amount of loan for indebted college students has now reached upto $30,000.
In 2018, two in three students who pursued their bachelor’s from private nonprofit or public colleges took study loan, as stated in the annual report by the Institute for College Access & Success.
Borrowers were burdened by $29,200 on average, a figure that has surged by 2 percent over the last year’s graduates. Student debt increased by an average of 4 percent in a year during the period of 1996 to 2012, the report mentioned.
In a statement, Persis Yu, director of the Student Loan Borrower Assistance Project at the National Consumer Law Center, expressed concerns about the current status of student debt and she said it was “Too high, even with the slowed growth.”
“The numbers are still going up, and that’s concerning. $30,000 is not sustainable,” she added.
The estimates in report have been derived from information about federal and private student loan provided by colleges. It does not account for the loans at for-profit colleges as only a few divulge what their graduates owe.
A significant reason behind the slower debt growth, according to the report, is apparently the increased state and local funding of public colleges, where more than three-quarters of students get enrolled.
At the time of Great Recession, the fall in tax revenue led to a decline in state and local funding by $2,000 per student. On the other hand, borrowing increased by nearly $1,100 per student, the report stated. With the recovery of state spending, the figures of student debt started decreasing.
However, state funding for colleges have become better but only to a certain extent since the recession, and dependence on student fee as a source of revenue “remains at a near high,” said State Higher Education Executive Officers Association.