College Debt Statistics
The rising cost of a college education means that a vast majority of students and their parents cannot simply afford to pay all of the tuition costs out of their own pocket. In turn, these students opt for federal and institutional aid options, which offer gift money and loans. However, the issue with this type of aid is that it is limited in sources and only a select few students are eligible for it. A large number of students, then, have to pursue loans from private lenders.
College debt statistics indicate that over the years the amount of average loan that each student has taken has been steadily on the rise. For instance, Finaid.org predicts that average debt after college for each senior year student who took a loan will be $ 28,700 in 2012. This significant amount will lead to a standard monthly payment of $330. According to the site, for a student to afford this monthly payment with ease, he/she should earn around $40,000 a year.
Other college student debt statistics point out that there are approximately 37 million students who have outstanding loans somewhere between $900 billion to $1 trillion dollars. Out of the 37 million students, nearly 14%, or 5.4 million students, have at least one payment that has passed its due date. Delinquency rates vary with the borrowers’ age groups: people in their 40s have the highest rate of default at about 12%, followed by people in their 50s and 60s have default rates of 9.4% and 9.5%. Students who are unable to complete their degrees struggle the most with their loan repayment. The reasons for default on loans may differ for each person. However, some of the most common causes are unemployment or underemployment and economic hardship.
As far as Student Credit Card Debt Statistics go, 91 % of undergraduate students hold at least one credit card. Around 50% of college students have more than four cards. The average amount of debt for a bachelor student is approximately $3,100 and for graduate students it’s $4,100. An overwhelming majority of more than 90% students use their credit cards to pay for college expenses while around 30% use them for college tuition.