Over the past few years, there's been a rise in student loan debt in the United States.

This comes as a result of the highly inflated college tuition rates. College tuition is becoming increasingly expensive and unattainable for the average American student.

For this reason, many decide to take out student loans in order to afford a college education and secure a better future.

But how bad is this so-called "student debt crisis?" Let's delve in to understand what the average student loan debt is, and its economic toll.

Average Student Loan Debt

Before we can answer the question about this debt crisis, we must first understand what the average student loan debt is.

About 69% of Bachelor's degree students graduated with student loan debt in 2019. According to Mark Kantrowitz, an expert in student financial aid and student loans, the average student loan debt is $29,900.

This is a significant amount of debt that new college graduates have to face.

In 2009, these figures were less than $23,000, in 2020, it's rising above $29,000. This is quite a sharp increase in student loan debt.

In 2020, the national student debt has risen to nearly $1.6 trillion. This astronomical amount is a good indicator that this really is a crisis that needs to be fixed before dire economic problems arise.

University Tuition Rates

Over the past 20 years, university tuition has more than doubled for private universities. People earning their bachelor's, master's, or doctorate degrees have to pay way more than people 20 years ago did.

There was a time when people could work part-time and afford to pay off their tuition without needing to borrow money from the federal government or from private lenders.

Those days are gone.

Even with student loans, some college students still have to work part-time to subsidize the costs of their education.

This goes to show that the economic climate we're in is vastly different than that of our parents. As a result, universities cost more, and students borrow more.

This could potentially get worse due to the economic effects of this pandemic. If families face great financial restraints due to the loss of jobs and stable income, they will need significant loans to get a college education.

There is a possibility that the rate at which people are borrowing may increase due to the economic crisis.

The Economic Toll

College graduates with significant debt tend to struggle financially when they've just joined the workforce.

Thankfully, with most loans, they are given a grace period before they have to start paying off their debt.

There are also many deferment and payment plans available for those who need it.

However, this does not negate the mental and emotional toll on young Americans who are burdened with debt.

When people are paying between $300-500 per month to pay off student loans, that also has an economic impact. They could be spending that money on basic necessities, and on boosting the economy by participating in consumer spending.

But they can't.

The economic toll is great, and yes, this is a crisis.

 

 

Author Bio:
Pearl M. Kasirye is a writer at Pearl Lemon, editor, and researcher who spends most of her time reading. When she isn't reading or working, she can be found sitting on her balcony writing her own novels or traveling.