Student loan debt has been in the news since several candidates in our last presidential race offered plans to provide assistance. Why is this a problem?

Since the year 2000, student loan debt has doubled. Forty-eight million Americans owe their college loans. That’s about one in seven Americans. Those between the ages of 25 and 34 are the most likely to have student loan debt, but the largest amount is owed by those between the ages of 35 and 49: more than $600 billion. The average total student debt continues to hover around $30,000. Although the benefits of a college education outweigh the costs in most cases, many graduates worry that their debt could affect their finances for years to come, redirecting money that could be invested in homes or retirement programs.

In total, this student debt is $1.7 trillion, second only to home mortgage debt of $12 trillion. The federal government owns $1.6 trillion of that student loan debt. The US government invests in higher education through need-based tuition scholarships, student loan programs, veteran’s benefits, and research grants; an educated and highly-skilled labor force promotes national prosperity. Highly educated workers provide higher tax revenue, are generally more productive and civic-minded, and are less dependent on social programs. Most experts believe that post-secondary education is critical to a dynamic and innovative economy.

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Most nations subsidize higher education to a much greater degree than the United States. And the cost of college education here has skyrocketed, both at public and private universities. States have been contributing large amounts of tax dollars to public colleges and universities, but after the Great Recession of 2008, most states severely reduced this funding. Since then, the loan balance per borrower has increased by 25 percent.

Another thing to understand is that one-third of the total debt is held by the seven percent of borrowers who owe more than $100,000. How does this debt get so high? We’ll talk about this next week and see how interest is calculated.

The US Department of Education currently offers federal student loan debt relief for loans owed to the government. To go studentaid.gov/debt-relief for more information. The program provides eligible borrowers with full or partial loan cancellation of up to $20,000 for Federal Pell Grant recipients and up to $10,000 for non-Pell Grant recipients. Pell Grants are offered to low-income students based on their FAFSA. The program is not available for loans from private lenders.