Degrees of debt
Higher education has long been thought to be a critical pathway to success, but it does come at a significant financial cost.
Data from the Federal Reserve shows that as of Q3 2023, Americans collectively owe over $1.7 trillion in student loan debt. That’s more than what Americans owe in credit cards or auto loans.
The impact of this debt is profound, affecting more than 45 million borrowers in the country.
According to educationaldata.org, the average student loan debt is $37,338 per borrower. This can be particularly challenging for recent graduates, who often have the added hurdle of lower entry-level salaries. The National Association of Colleges and Employers (NACE) reported an average starting salary of $58,862 for college graduates in 2023.
Student loan debt not only hampers personal financial growth, but also has broader economic implications. For instance, it impacts borrowers’ ability to make major purchases, like homes.
On the topic of housing, affordability remains a pressing concern as mortgage rates remain over 7%. The latest “State of the Nation’s Housing” report from the Joint Center for Housing Studies of Harvard University finds that you need an annual income of roughly $117,000 to afford a median-priced home in America.
This figure is nearly double the average starting salary of a college graduate, highlighting the disconnect between earnings and living costs. Meanwhile, the weight of student loans adds another layer of difficulty, making it even more challenging for graduates to navigate their financial futures.
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