Is Gen Y Drowning in Student Debt?
With a tidal wave of student debt inundating students across the country, a new report shows that what's true in literal floods is true in this metaphorical one as well -- some of us live on the high ground and some in low-lying areas, and location very much influences how deep underwater you are. The 2009 report on the debt levels of the previous year's graduating class from the non-profit Project on Student Debt crunches the numbers and concludes:
Nationwide, average debt for graduating seniors with loans rose from $18,650 in 2004 to $23,200 in 2008, or about six percent per year. State averages for debt at graduation in 2008 ranged from highs near $30,000 to a low of $13,000. High-debt states are concentrated in the Northeast, while low-debt states are mostly in the West.While our debt may be going steadily up, our job prospects, like the economy, have tanked. Clearly, that's bad news for students, but is it also bad news for society? I know many twenty-somethings saddled with so much debt they stay in unsatisfying jobs or careers they have only chosen for financial considerations, put off further education, and stop themselves from dreaming of risky but potentially lucrative options like starting a business (the link between employer and health insurance link doesn't help here either). In the process they limit their personal and economic potential in order to keep their heads above water. And forget about saving for retirement or buying a home, thereby helping employ an investor, real estate agent or construction worker.
Our debt isn't just stunting our careers. It may also be playing a part in stunting the economy. As Lauren Asher, associate director of the Project on Student Debt, says, "both state and federal policy-makers need to think about the implications of a generation of college graduates paying off student loans instead of buying houses, starting businesses or saving for retirement."
For detailed information state-by-state and college-by-college information, download the free report, or for more discussion of the issue check out this interview with Nan Mooney, author of (Not) Keeping Up With Our Parents: The Decline of the Professional Middle Class or this one with Anya Kamenetz, the author of Generation Debt.
(Flood image by the US Geological Survey, CC 2.0)