The New Toll of American Student Debt in 3 Charts

The New Toll of American Student Debt in 3 Charts

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It’s a sign of the times: A new game show, “Paid Off,” debuted on Tuesday offering winners not dream vacations or new cars, but a pile of cash to help lessen the crushing weight of their student debt.

The reach of America’s student loan problem — total debt is now about $1.4 trillion — is vast. Millions of people are in default, and many young people are graduating into adulthood facing payments that limit their ability to buy homes and to start families of their own. Some employers have even begun dangling student loan repayment benefits as a perk to potential workers.

A new analysis of federal loan data indicates that the average student’s debt load is plateauing, and perhaps even declining slightly, at least when adjusted for inflation.

That should be welcome news, except that it comes with a major asterisk: College has not become more affordable, but more students seeking bachelor’s degrees, especially at higher-cost colleges, have borrowed as much as they can under the federal loan program.

The data also shows more students opting for lower-cost public colleges. That seems like a practical move. But, Mr. Kantrowitz said, it suggests that families are feeling financially squeezed.

“Parents are realizing they just can’t afford that more expensive college,” he said. “The shift from private to public is of concern mainly because it is a sign of financial pressure, a kind of canary in the coal mine.”

More problematic is separate data that shows low- and middle-income students enrolling in associate degree and certificate programs instead of bachelor’s degree programs. That, Mr. Kantrowitz said, is “of greater concern because students who could benefit from a bachelor’s degree are scaling back their educational attainment for no reason other than college affordability.”

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