American Students Borrowed Over $100 Billion in 2010

It's an unfortunate Catch-22 - students have to borrow increasingly high levels of money in order to attend college or university, while finding decent jobs after graduation is becoming increasingly difficult.

According to the USA Today, outstanding student loans in the United States will exceed the $1 trillion level for the first time ever this year. That is more money than what Americans currently owe on their credit cards.

In 2010, American students borrowed over $100 billion to finance their educations. This is the most money that has ever been borrowed in a single year by US students.

According to the College Board, students are borrowing twice as much as they did just a decade ago, even after adjusting for inflation. Full-time undergrad students borrowed an average of $4,963 last year, up 63% from a year ago.

The number of students in default is steadily on the rise as well - according to the USA Today, 8.8% students were at least 9 months behind on their student loan payments in 2009, up from 6.7% in 2007.

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It's a vicious circle right now, as:

-many schools are raising their tuition fees
-part-time summer jobs are harder to come by
-parents have less money to contribute to student's expenses
-full-time jobs are harder to come by after graduation
-other expenses (food, heating) are on the rise

Let's be honest - it's a pretty scary time to be a student on the cusp of graduating, especially when you are carrying a mountain of debt.

Source: USAToday.com - Student Loans Outstanding Will Exceed $1 Trillion This Year

Filed under: General Knowledge