College debt loads in the U.S. leveling off for many students
Good news, college grads — student loan debt burdens are growing more slowly than they have for previous classes. The bad news? You're still pretty deep in the red.
People who got their bachelor's degrees from a public college or nonprofit university in 2018 graduated owing an average of $29,200, according to the Institute for College Access and Success (TICAS). That's the second-highest debt load students graduated with in the past five years — graduates in the class of 2015 left school with a debt burden of $30,100.
Student debt loads are growing at a slower rate after a recent spurt in state funding for higher education, with debt loads increasing last year just 2% from 2017. Debt burdens previously jumped an average of 4% per year between 1996 and 2012.
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TICAS compiled its report using the most recently available federal data from public colleges, representing more than 70% of U.S. students. The analysis excludes student debt for private universities.
Meanwhile, total college debt remains at an all-time high of $1.6 trillion. That financial load is making it hard for many young people to do things that previous generations may have taken for granted, like buying a home or starting a family or saving for retirement. Some millennials even report struggling to afford groceries.
The college debt problem isn't likely to go away anytime soon. While the Federal Reserve continues to cut interest rates this year, it won't help last year's graduates with federal loans that have locked-in interest rates, though it may benefit student borrowers with private loans that have variable interest rates.
TICAS said that increased education spending by state and local governments has helped keep a lid on student debt. In the four years following the recession, state spending per student tumbled as colleges raised tuition to cope with budget cuts. By 2016, state spending partially rebounded to about $1,150 per student from 2012 lows, the report found.