Posted on Wed, Oct 19, 2011 : 7:07 p.m.
Student loans outstanding will exceed $1 trillion this year
By AnnArbor.com Staff
As more and more people turn to student loans to finance their education, the amount of student loans outstanding will exceed $1 trillion for the first time this year, USA Today reported.
The Federal Reserve Bank of New York reports that Americans now owe more on student loans than credit cards.
Full-time undergraduate students borrowed an average $4,963 in 2010, up 63 percent from a decade earlier after adjusting for inflation, according to the College Board.
Many worry about the implications of this on young people, who will start their post-graduate lives further in debt.
Comments
cinnabar7071
Thu, Oct 20, 2011 : 5:06 p.m.
Yet no shortage of people trying to get in. <a href="http://www.annarbor.com/news/university-of-michigan-at-record-high-levels/">http://www.annarbor.com/news/university-of-michigan-at-record-high-levels/</a>
pvitaly
Thu, Oct 20, 2011 : 5:52 p.m.
Well of course - everyone wants to see college degrees. It's a vicious cycle
Goober
Thu, Oct 20, 2011 : 3:21 p.m.
I worked my way through college on the basis that my parents could not afford to pay. I graduated with no college loans or debt. I do not understand why our kids do not do the same - work their way through college. Better yet, why rack up the size of debt going to a 'big name' college versus attending a community college instead. This problem of escallating college tuition costs is the same as the cost of health care. Society seems okay with the rising costs of each, not doing much of anything to try to pressure or find reductions.
Left is Right
Thu, Oct 20, 2011 : 11:34 p.m.
The availability of easy loans has allowed institutions of higher learning to crank tuition up with virtually no accountability. When I went to Michigan, undergrad tuition was less than $400 a term. Now I pay $7000 for my kids. Has Michigan gotten that much better? Even with today's high wages it would be difficult to put oneself through school by working part time.
pvitaly
Thu, Oct 20, 2011 : 5:24 p.m.
And, minimum wage is 7.40. Even if you made $10/hr (good luck getting a job with flexible hours that will pay this), that is still around $1600/mo before taxes.
pvitaly
Thu, Oct 20, 2011 : 5:23 p.m.
Thomas - When I was starting college, I wasn't awarded any grants because on paper my parents made too much money for me to get any grants. Far from the truth. Also, I am sure that every class taken at a CC can transfer to a university. BUT, a CC doesn't have every class you NEED to fulfill all the requirements you need to get into the program. You still have to take classes at the university before admitted. I am dealing with this right now with EMU.
Thomas
Thu, Oct 20, 2011 : 5:14 p.m.
@pvitaly, I disagree with you because I went to WCC and they had a transfer program for UoM. Every class taken at WCC would transfer to UoM. I do agree with you about the tuition though, it would be very difficult for someone making minimum wage to pay for college but remember grants are available. I called my current university about a possibility of a grant and within 30 seconds I was given $700 per semester and that was just one phone call.
Thomas
Thu, Oct 20, 2011 : 5:10 p.m.
Because they are too busy playing beer pong.
pvitaly
Thu, Oct 20, 2011 : 4:32 p.m.
When did you work your way through college? How much did college cost for you? Today, 1 semester at EMU is $4,400 - not counting any living expenses. That's 4,400 for 3.5 months. Roughly $1,300/mo. Working 40 hours a week for a month at $8/hr will earn $1,280 before taxes. What about books/supplies/eating/paying rent/gas $ to commute. And then, working 40 hours a week while taking 15 credit hours isn't the easiest thing to do and still get good grades, let alone pass. Sure, at WCC - 2 years of college is about $6,000 for tuition... But, community colleges don't have every single class you need in order to get into your program at a university.
braggslaw
Thu, Oct 20, 2011 : 10:25 a.m.
There are many paths to a four year degree. My friend went to WCC for two years was accepted at Michigan and graduated in engineering. WCC was inexpensive and he was able to live at home for two years and pay without borrowing any money. He took loans out for Michigan but only for two year.s A very frugal way to get a degree.
Lionel Hutz
Thu, Oct 20, 2011 : 12:47 p.m.
Your friend made good decisions and should be commended. It's nice to see that people still realize that there are consequences to taking out all those loans and majoring in fields that have little to no future.
velmaellis
Thu, Oct 20, 2011 : 9 a.m.
The cost of higher education is ridiculous, my son wanted to go to college but we could not afford so we choose the "High Speed Universities" for his education while working now he working for fortune 500
Thomas
Thu, Oct 20, 2011 : 5:09 p.m.
Good job! Yes there are other ways to get an education. I myself went to a community college while my employer paid for it then I shopped around for an accredited university for my undergraduate which i paid out of my own pocket. I know people with Harvard degrees making a boat load of money but I also know someone with a no name college degree making great money too. Next time an opportunity arises to listen to a CEO of a major corporation really listen and watch that person. The people in those positions have charisma as well as an education.
Polyjuce123
Thu, Oct 20, 2011 : 6:17 a.m.
This idea of needing credentials outside of your HS education is completely foreign to older generations, particularly baby boomers nearing retirement. College was historically for the wealthy, and essentially was for shaping boarding school students into high ranking exec's or government staff. It simply wasn't necessary, many baby boomers walked into the world out of HS and entered a job they still hold today. Still only less than 25% of American's over 25 have a degree, so we know we don't have a issue of "too many graduates". What we do have however is employers using the current financial crisis to leverage low wages and zero benefits to current young adults. Employers are well aware that out of Michigan's near 10% unemployment rate there are many college graduates unemployed, talent they can bring into their organization at the cheapest cost. For profit institutions such as Phoenix and ITT Tech have also prayed on people who have no business attempting to finish a degree. Even many "traditional" Universities have dismal graduation and retention rates, leaving students with debt and no degree...the worst possible scenario. College is a wise choice for those who are driven enough to complete the 4 years, and who have planned their careers before graduation. The other half of this debt crisis lies with the employers. Students need to understand if they don't attain a high GPA, maintain perfect credit, and start interning your freshman year, they really haven't got a chance to land a decent paying job. This is why the largest percentage of unemployed Americans (nearly 24%) are ages 18-25. IMO until the boomers finally retire, there will be no room for gen x and y to finally rise in the workplace.
Thomas
Thu, Oct 20, 2011 : 5:02 p.m.
There is something missing from this statement and that is when the baby boomers left high school most of the jobs in the country were labor intensive or factory jobs. Today is the information age and most of those factory jobs went overseas, now it takes more than just a will to work hard and earn an honest days wage. If you want to be paid it takes some kind of degree and internship to learn a skill. I would like to see some information baking the 25% of Americans over the age of 25 have a degree because about 98% of the people I work with have at least an undergraduate degree.
5c0++ H4d13y
Thu, Oct 20, 2011 : 4:50 a.m.
Cheap loans ... create high demand ... inflated price for product back by tax payers ... bubble ... Bubble ... BUBBLE ... POP!
Macabre Sunset
Thu, Oct 20, 2011 : 4:07 a.m.
Everyone who throws around the word "slavery" like it's in any way relevant to today's world is smoking something most cities in Michigan are trying to ban. Crack a history book and learn what slaves actually went through. It'll put your comfy little lives in perspective.
G. Orwell
Thu, Oct 20, 2011 : 3:01 a.m.
Debt Slaves! Thank your politicians and bankers.
pvitaly
Thu, Oct 20, 2011 : 12:20 p.m.
Gorc - I hate your kind of statement. So, it is a personal choice to take out student loans... sure. But, if someone can't afford to go to college without student loans and they don't go to college - you will probably make some remark about them not choosing a higher education so they shouldn't complain about working at "Arby's." Right?
Gorc
Thu, Oct 20, 2011 : 9:37 a.m.
Signing a note that commits oneself to taking on any form debt is a personal choice. People who barrow money put themselves in that position.
Jim Mulchay
Thu, Oct 20, 2011 : 2 a.m.
It is interesting to me that while everyone stresses the importance of a college education there is no effort by any elected officials (state, federal) to make college affordable (they just throw more money at it) - no attempt to push public colleges / universities to reduce tuition, fees, room/board, etc - maybe the next protest movement should be the cost of college? Maybe instead of more loan programs (and more loan defaults) the federal and state governments should look at capping tuition, fees, etc. - or better yet - rolling them back to a point where an average family might be able to save enough to go to college?
leaguebus
Fri, Oct 21, 2011 : 3:20 a.m.
My son worked his way through college too. We still owe $50k.
Goober
Thu, Oct 20, 2011 : 3:20 p.m.
I worked my way through college on the basis that my parents could not afford to pay. I graduated with no college loans or debt. I do not understand why our kids do not do the same - work their way through college. Better yet, why rack up the size of debt going to a 'big name' college versus attending a community college. This same problem of escallating college tuition costs is the same as the cost of health care. Society seems okay with the rising costs of each, not doing much of anything to try to pressure or find reductions.
Tone
Thu, Oct 20, 2011 : 1:59 a.m.
P.S. most professors and even public school teachers are the "1%" rich they rail against on a pay per hour worked basis. You do the math, 945 contractual hours for over $100,000 in compensation; <a href="http://www.southgateschools.com/files/district/2009%20Transparency%20Reporting%20-%20Web-1.pdf" rel='nofollow'>http://www.southgateschools.com/files/district/2009%20Transparency%20Reporting%20-%20Web-1.pdf</a> <a href="http://www.grpublicschools.org/grps1/images/stories/Departments/transparency_reporting/pdf/finalGREAAgreement2007-2011.pdf" rel='nofollow'>http://www.grpublicschools.org/grps1/images/stories/Departments/transparency_reporting/pdf/finalGREAAgreement2007-2011.pdf</a> <a href="http://gpschools.schoolwires.net/176710824214738427/lib/176710824214738427/GPPSS%20Financial%20Series_Direct%20Employee%20Compensation.pdf" rel='nofollow'>http://gpschools.schoolwires.net/176710824214738427/lib/176710824214738427/GPPSS%20Financial%20Series_Direct%20Employee%20Compensation.pdf</a> <a href="http://www.pccs.k12.mi.us/sites/pccs.k12.mi.us/files/shared/district/budget/contracts/P-CEA-teacher-contract-2009-2010.pdf" rel='nofollow'>http://www.pccs.k12.mi.us/sites/pccs.k12.mi.us/files/shared/district/budget/contracts/P-CEA-teacher-contract-2009-2010.pdf</a>
Tone
Thu, Oct 20, 2011 : 1:54 a.m.
In other completely unrelated news (we promise) the average professor income is up 63 percent from a decade earlier after adjusting for inflation. How long before John Q. Public catches on? Never as long as he keeps receiving the same liberal brainwashing of useless spun information.
treetowncartel
Thu, Oct 20, 2011 : 1:53 a.m.
Someone has to fund the overpaid administrators and faculty at these places. Education is a business, the student a consumer.
hut hut
Thu, Oct 20, 2011 : 1:11 a.m.
Huge student loans? And for what? Starbucks and Burger King jobs? With nothing on the horizon except to work for slave wages while the 1% gets richer and richer sending their jobs overseas, getting tax breaks without creating jobs and buying corporate jets. This is why people are in the streets around the world and those brave souls Occupying Wall Street.
Goober
Thu, Oct 20, 2011 : 3:26 p.m.
Many of the 1% have nothing to do with sending jobs overseas as they are pro athletes or movie stars.
Lionel Hutz
Thu, Oct 20, 2011 : 12:43 p.m.
I think the problem is that many students major in degree fields that have minimum return on investment. Sure, go ahead and get that liberal arts degree, but have an understanding that you will have a harder time finding a job and accept that reality.
David Briegel
Thu, Oct 20, 2011 : 12:55 a.m.
This was a bountiful gift from the "people's representatives" to their true masters, The Banksters!
Gorc
Thu, Oct 20, 2011 : 2:32 a.m.
David, I couldn't agree more...the Banksters forced all those students to sign the dotted line.
G
Thu, Oct 20, 2011 : 12:45 a.m.
Intelligence is not limited to the rich, or to people whose countries will pay the bill for them. There is only so much work (if you're lucky enough to find a job) you can do and still do well in school. Ergo, in a country that believes everyone should have a chance, student loans are a necessity.
john doe
Thu, Oct 20, 2011 : 12:40 a.m.
Many people do not know this: An increasing number of international students are taking out huge student loans her in America and then leave back to their country after graduation WITHOUT paying their loans back. It is almost impossible to track these people down once they have left the country and either the university or government are stuck with the bill.
David Briegel
Thu, Oct 20, 2011 : 12:57 a.m.
It's just foreign aid.
G
Thu, Oct 20, 2011 : 12:48 a.m.
I have not seen this before. If it is true, this is outrageous--treasonous even. Can you give some web references to substantiate this?
jcj
Thu, Oct 20, 2011 : 12:35 a.m.
Better yet lets see how many of those with outstanding loans can do the math!
Tom Joad
Wed, Oct 19, 2011 : 11:45 p.m.
Let's do the math: A trillion dollars is a thousand billions or a billion thousands, any way you slice it, that's a lot of cash