As a college junior, I took out a student loan for the first time. It was a long process, and I actually had to go through an online entrance counseling session to make sure that I was aware of the actions I was taking and what my options were post-graduation.
During the process I started to wonder about the current student loan situation. It is a hot topic during this presidential race, especially between Hillary Clinton and Bernie Sanders. How much debt is out there? Who is holding the debt and for how long? Will graduate school be the same? These were all of the questions that I had about student loans and like a typical millennial, I took to the Internet to find out.
I began with the current average cost of tuition. As a college student, I know that mine personally increases annually. In his article “Tuition Rising: Why college costs so much,” Professor Ronald Ehrenberg of Cornell University explores the rising cost of higher education. According to Ehrenberg, annual inflation causes tuition at private and state universities to rise at a rate of two to three percent. The federal government can also contribute to the rising costs due to select grants not increasing with inflation. According to College Board, the average student pays $32,405 for private institutions and $9,410 for in-state students at public colleges. Students who do not live within the state will pay more at $23,893.
College is certainly expensive, and the price does not appear to be declining anytime soon. Data from The Institute for College Access and Success claims that 71 percent of college graduates from a four-year institution incurred debt in 2012. The students with the most debt attended a private, nonprofit institution. In 2014, the average student graduating from a public and nonprofit college had an average student loan debt of $28,950. The average debt has risen at a rate of twice that of inflation.
Student loan debt is certainly on the rise with institution. Both presidential candidates Hillary Clinton and Bernie Sanders claim to fix this situation once in office. On his website, Sanders claims to make public colleges and university tuition free, citing how it worked in Scandinavian countries and Germany.
Clinton also promises less debt. Her website promotes “The New College Compact” that will allow refinancing options for current students and accountability for colleges and universities in controlling costs.
There are a million decisions to make regarding college or university. The financial aid office at any college you are considering is an excellent resource for talking through payment options. For general information regarding student loans, visit the Federal Student Aid website.