Twenty to Life: As Federal Student Loan Interest Rate Hike Looms, New Research Shows Higher Education Turning Into Multi-Decade Debt Sentence
National Average of 21.1 Years to Pay Off Student Loan Debt
MADISON, Wis. — With mere days left to stop the interest rates on federal student loans from doubling, new national research from One Wisconsin Institute, a member of the ProgressNow Education Network, found it is taking, on average, over two decades for Americans with undergraduate degrees to pay off their school loans.
“A college education is supposed to be a path to the middle class, not a sentence to decades of debt. But, based on our original research, that is exactly what the fallout is from the trillion dollar plus student loan debt crisis,” commented One Wisconsin Institute Executive Director Scot Ross.
According to the Institute’s research, the average length of repayment for all those reporting student loan debt is 21.1 years. For those individuals with some college but no degree, the average repayment term was 17.2 years, associate degrees reported 18.3 years, bachelor degrees 19.7 years and graduate degrees clocked in at 23 years.
The research is based on responses to a nationwide survey sent to a network of not-for-profit organizations. Over 61,000 individuals completed the detailed survey of their personal finances including their income and levels of educational attainment, whether they ever had a student loan or were currently paying one off and the length of their repayment terms.
Student loan debt is now estimated to top one trillion dollars and is the second largest form of consumer debt, exceeding credit card and auto loan debt and exceeded only by home mortgage debt. Rapidly increasing school tuition coupled with flat or declining public funding for university systems and stagnant financial aid means that increasingly, families and students are forced to take out more and bigger loans to pay for their schooling. That in turn has created a windfall for lenders. For example, the federal government is estimating it will reap a $51 billion profit from interest on student loans in the next fiscal year, more profit than that earned last year by Exxon Mobil, the nations largest corporation.
“The status quo, with more than 37 million Americans saddled with over one trillion dollars in student loan debt is not working. Students and their families are doing the right thing, working hard and taking responsibility to pay for their higher education. We need to make sure their efforts to get an education help them to become productive citizens, not multi-decade debtors,” concluded Ross.
One Wisconsin Institute is a 501(c)(3) statewide research and education organization of 60,000 online supporters that utilizes research, communications, rapid response and online organizing to achieve its vision for a Wisconsin with equal economic opportunity for all. The Institute’s research and staff have appeared in thousands of media articles at the national, state and local levels, including The Rachel Maddow Show, The Ed Show, Melissa Harris-Perry, National Public Radio, The Thom Hartmann Program, The New York Times, USAToday and The Washington Post.
ProgressNow Education is a national network of 21 state-based 501(c)(3) organizations improving communications strategy and delivery in the progressive movement. ProgressNow Education has state partners who are experts in research and communication issue campaigns in California, Colorado, Florida, Iowa, Georgia, Massachusetts, Michigan, Missouri, Minnesota, North Carolina, Nebraska, New Hampshire, New Mexico, Nevada, Ohio, Pennsylvania, Texas, Utah, Virginia, Washington and Wisconsin.