Editorial: College debt continues to be a big problem
Student loan debt is a growing problem in Minnesota and across the country, according to a new report from the Pew Research Center.
College enrollment has been growing, as those who can't find jobs go back to school, and student debt now affects nearly 1 in 5 U.S. households.
The young and the poor are carrying the heaviest loads.
In Minnesota, 71 percent of students were in debt in 2010, carrying an average burden of $29,000. Nationwide, about two-thirds of students were in debt, with the average debt at $25,000.
Nationwide, the analysis by the Pew Research Center found that more than 22 million households, about 19 percent, carried college debt in 2010. That's twice as many as in 1989.
In 2007, just prior to the recession, about 15 percent of U.S. households had college debt. The increase from 2007 to 2010 was the largest three-year hike in student debt in more than 20 years.
Higher tuition costs are to blame, along with growing college enrollment during the economic bad times. The poor feel the burden the most: Lower-income people in search of higher-wage jobs are enrolling in community colleges, public universities and other schools as a way to increase their odds of landing a decent job.
But college debt has also hammered the well-to-do, who are straining to pay for expensive private colleges. Rich or poor, fewer college students than before are able to step into good-paying jobs after they graduate, due to the troubled economy.
So debt has jumped among lower-income households -- many college grads are stuck with part-time jobs or are going on to graduate school, according to Pew.
As a share of household income, the debt burden was the greatest for the poorest 20 percent of households, or those making less than $21,044, according to the Associated Press.
In all, 40 percent of U.S. households headed by someone younger than age 35 owed college debt, the highest share of any age group.
The study released Wednesday is based on the Survey of Consumer Finances, conducted every three years and sponsored by the Federal Reserve.
Some of the tuition increases reflect states stepping away from their traditional funding of higher education, leaving students to foot the bill.
But whether college costs should be cut or state funding increased, the high price of schooling, and the student debt it creates -- are an increasingly serious problem for everybody.
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