Economic Development News & Insight


Infographic: The future of student loan debt in America

Ivan Serrano / June 1, 2015

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Over the past 30 years, college tuition has increased a whopping 500 percent and now more than 37 million Americans owe a total of $1.2 trillion in student loans with that number expected to reach $2 trillion by 2025 if current borrowing patterns continue. This amount surpasses every other household debt besides a mortgage. Is it any surprise then that these indebted graduates are taking longer to achieve certain milestones in their life such as buying a house and starting a family? It’s estimated that the total lifetime wealth loss for all indebted graduates is around $4 trillion. This amount isn’t just the borrowings plus the interest payment. It’s the overall effect paying these loans have on young adults. While college graduates are busy paying their loans, it means they cannot put money towards a savings account, retirement or making large purchases such as a house or car.

The overall loss of lifetime wealth doesn’t just affect the individual; it affects the economy as whole. Without a household, the new generation will be less likely to make other home-based purchases such as furniture and appliances thus decreasing overall purchasing power.  As well, the rising student debt will affect future generations. Since the current generation are not able to save as much, their children will likely suffer even greater student debt once they reach college age. And in fact, this is already happening as parents now are only able to fund 27 percent of the child’s college expenses versus 36 percent in 2010.

Although there has been some movement towards making the repayment of student loans less of a burden on graduates, the actual cost of college does not appear to be decreasing any time in the future. The embedded infographic will provide more information on the state of student loan debt today, for the future and its overall worth. While technically a college degree might provide you with a better paying salary now, the question is whether it will continue to be worth the cost in the future.

Infographic on the future of student loan debt

2 responses to “Infographic: The future of student loan debt in America”

  1. Thanks for this article. I will also like to talk about the fact that it can often be hard when you’re in school and merely starting out to initiate a long credit standing. There are many learners who are only trying to endure and have a protracted or good credit history are often a difficult factor to have.

  2. At the core two things stand out: Colleges, for profit schools and universities benefit from student debt which is largely unpaid and, there are no jobs for most graduates.

    This economy is not good for most college graduate and certainly not good for any high school graduate or drop out. No matter what *spin* comes out of the White House tens of millions of American citizens, men and women, are unemployed or working part time or for low wages.

    Please cut through the lies that are being told students about STEM employment and reveal the shameless greed of every person who supports increased immigration and the Visa program that steals jobs from American workers to give them to foreigners. This has been going on since the 1980’s and is a plague on our society. Foreign employment has moved from the call centers to professional ranks. It is now taking jobs from our American citizens who are college graduates.

    Do stories about IT workers (STEM) who are fired to make room for the imported Visa holders. Go after the Zuckerbergs in the USA who insist there are no American workers intelligent and skillful enough for employment.