College Debt 2021

June 10, 2021

Judd Apatow, a famous comedian said this about college, “College is the reward for surviving high school.” For many students, college is taken very seriously. They feel all that hard work in high school as well as the growing pains of teenage years have been rewarded when they step onto a college campus as a first-year student. But at what cost can we afford this “reward”? And, most importantly, why is college debt in 2021 on the rise?

With 2020 being a difficult year in terms of jobs and income, many student loan debts were put on pause in March, meaning that many students and also graduates with debt could forget about it for a while until things started picking up. But, since October 2020, this pause was resumed and with everything opening up and getting back to “normal” thanks to the many COVD vaccines, millions of Americans are now having to face their biggest fear yet, their student loan. How much debt is there? Americans now owe more than $1.53 trillion in student loan debt. That money is not only owed by young people fresh out of college, but also by borrowers who have been out of school for a decade or more. Statistics state that more than 44.7 million Americans have student debt loans, which means that each person owes at least $37172. The standard repayment timetable for federal loans is 10 years, but research suggests it actually takes four-year degree holders an average of 19.7 years to pay off their loans.

To those who have already graduated and have a steady job, this could mean that almost $400 will go out of their paycheck to be able to pay their college debt. But, what about those who are still in college or thinking about going to college? According to some studies, the price of college is going up. The average tuition and fees increased 1.1% for public colleges and 2.1% for private institutions. Also, this year’s incoming freshman class can expect to borrow more than $38,000 to help cover the cost of a bachelor’s degree. But not only is that alarming. Studies show that even the interest rates on federal student loans are set to rise by nearly one percentage point starting in July. This will increase monthly loan payments on a 10-year repayment term to $99.99 from $95.41 for every $10,000 in debt borrowed that academic year.

Is it possible to even dream of ever being debt-free? Of course! Even before Biden’s inauguration, his staff reiterated the president’s support for Congress to “immediately” cancel $10,000 of federal student loan debt per person as part of COVID-19 relief. That amount could wipe out debt completely for nearly 15 million borrowers who owe $10,000 or less, according to federal data.But even so, millions of Americans owe way more than $10,000. So what will happen in the end? We just have to wait and see.