The student loan debt crisis continues to remain a sore eye for students around the country.
While many have proposed ideas to combat the crisis, students continue to bear the brunt of the growing crisis. Over the last decade, the total amount of student debt has nearly doubled to $1.19 trillion dollars, with 7 million borrowers in default. While undergraduates are capped at $57,500 in federal loans (with only 2% of undergraduate student borrowing above $50,000), not all students are not bound by that borrowing cap, with many graduate students borrowing in excess of $100,000. The average law student owes $140,000 at the time of graduation, while the average medical student owes $161,000.
Interestingly enough, those students with less overall student debt are more likely to end up in default, according to a new study by the Federal Reserve Bank of New York. Those who owe between $1,000 and $5,000 in federal student loans have defaulted on their obligation 34% of the time, compared to those with over $100,000 who default 18% of the time. Logically, it makes some sense, since graduate level students are more likely to obtain higher paying jobs.
As a result, many of those who have only obtained an undergraduate degree are less likely to live independently of their families. A new report by the Pew Research Center concluded that 43% of undergraduate students continue to live at home after graduation, which is an increase of 4% compared to statistics over the prior decade. If the crisis is not resolved, the ramifications will continue to stifle struggling students and can have an impact on our overall economy.