MINNEAPOLIS (WCCO) – The Class of 2019 at Morehouse College in Atlanta will walk away with zero student debt thanks to a $40M gift from billionaire tech investor Robert Smith.
His generosity is potentially life-changing for the 400 graduating seniors, but what about the rest of the country? How much college debt do students have? Good Question.
In the United States, there’s $1.5 trillion in student debt, which is more than credit cards ($850B) and auto loans ($1.25T).
According to The Institute for College Access & Success (TICAS), two-thirds of college seniors who graduated from public and private nonprofit colleges in 2017 had student loan debt. The average amount was $28,650. That’s an increase from about $13,000 (current dollars) in 1996.
According to Meredith Fergus with the Minnesota Office of Higher Education, student loan debt had been increasing up until the recession. Since 2012, the average amount owed has remained relatively steady.
Fergus says, in Minnesota, that’s partly due to more help from the state legislature and slower growth in college tuition increases, but also because families are borrowing less.
“When you’re faced with a financial crisis like that, you really try to question why you’re borrowing,” Fergus said. “I think we’re seeing debt level recline a little bit because families are getting smarter about when they should borrow as opposed to using other resources and how much they borrow.”
According to TICAS, Minnesota ranks ninth in the nation when it comes to average student debt – $31,734.
“Part of that is we have higher tuition,” Fergus said. “We also have higher income and higher income families are more comfortable taking on debt.”
According to a study from One Wisconsin Institute, it takes an average of 19.7 years to pay off a 4-year degree.
Fergus says she does have a few guidelines for when it comes to college loans. She recommends not taking out more than a student’s expected first-year salary, take out less every year and don’t put college loans ahead of retirement savings.