The total loans of students attending a college or university, NOW student loan debt greater than credit card debt for the first time this year exceeded $1 trillion ( A TRILLION!)
This is an increase from last year, when total loans exceeded $100 billion.
Janet Turner, head of financial aid at the Univ. of Portland, the average amount of undergrad debt for the 2010-2011 graduation class was $20k per student. The average student loan debt for undergraduate students for the 2010-2011 academic year was $10,769,045.
The devastating combination of high student loan debt and job unavailability is an economic detriment for students and families across the U.S.
"There’s a lot of outcry on student debt because nationwide the economy has made finding a job difficult," Turner said.
On Oct. 26, President Barack Obama announced his plan to enact a law to ease the burden of student loan debt starting next year. The law was originally planned to go into effect in 2014 through Congress.
"We’re not waiting for Congress," Obama said. "Last month, when I addressed a joint session of Congress about our jobs crisis, I said I intend to do everything in my power right now to act on behalf of the American people – with or without Congress. We can’t wait for Congress to do its job. So where they won’t act, I will."
The law will allow students with federal loans from 2008 and on to cap monthly loan payments at 10 percent of their discretionary income, which will replace the original 15 percent. It also enables debt forgiveness in 20 years instead of 25 years.
The new rules also allow borrowers to consolidate their government – backed student loans and pay a lower interest rate.
The changes apply solely to government loans and do not include private student loans issued by banks or loans that students have defaulted on.
"Our loan default list is 1.4 percent for UP, which is way below the national average, and used to be .9 percent," said Turner.
According to Turner, the amount of debt a student is advised to take on depends on their major – since some jobs are in greater demand or have higher pay than others – and the amount of financial support they receive from family and outside scholarships.
"It’s an individual choice," Turner said. "We hope most families have saved for school, and debt is a family decision."
Senior Katie Doyle predicts her accrued student loan debt to be around $80,000 to $100,000 upon graduation in May 2012.
"I decided to go to a private school and major in education, so I’m going to exit without a job and when I find a job, a teacher’s salary," Doyle said. "One of the things that makes me sad is our generation, who is excited to join the world and make a difference, is being stifled by this debt."
According to Turner, there has been an increase in parents borrowing money and students looking for jobs on and off campus to help pay for their education.
"I paid for all my living, food and free-time activities through working in the summer and working consistently through school," UP 2011 alumna Hannah Pike said. "I have $70,000 in debt, most of which is to my parents but some of it is to banks."
Pike graduated from UP with a degree in French studies and now works for Nike as a data administrator.
UP 2011 alumna Emily Dermann incurred about $16,000 worth of debt during her four years at UP after taking out several loans and receiving the President’s Scholarship worth $54,000, a Pell Grant and a work study grant.
"Based off of what I’ve read so far, I’m grateful for Obama’s decisions regarding loan debt and am interested to see how this plan unravels without Congress’ full agreement," Dermann said. "Loan debt and money management in general are definitely major sources of anxiety for me right now."
Dermann graduated from UP with a degree in elementary education and is currently coaching middle school volleyball, working as a nanny and substitute teaching for Portland Public Schools.