The pursuit of higher education has been an integral step in achieving the American Dream since James Truslow Adams . He defined the American Dream as the hope for 鈥渁 better, richer and happier life for all our citizens of every rank.鈥 Collectively, though, people in the United States have racked up $1.7 trillion in debt on this step alone.
Data tells us that, for some, a college degree is one means to this end. Over the course of a lifetime in the same career, a worker with a bachelor鈥檚 degree can than a worker with a high school diploma as their highest educational attainment. That earnings gap grows significantly with every advanced degree, but that long-term financial gain comes with a price tag that could take close to a lifetime to pay off.
America鈥檚 current student debt crisis is inextricably of the last half-century. Still, have made the trade-off between carrying tens of thousands of dollars in federal student loans for higher earning potential down the road.
Decades of for higher education have resulted in tuition hikes at both public and private institutions. Since 2000, the average cost of college per student has . These exorbitant costs have outpaced currency inflation, leading to increasing debt loads and stagnant wages when it comes time for repayment.
Cautionary tales of graduates being saddled with six-figure debt sums are often used to contextualize the near-incomprehensible $1.7 trillion figure. For some, like , those stories鈥攁nd sums鈥攁re accurate. For the person pursuing an undergraduate degree, however, their total is notably less鈥.
But the burden of repayment is borne differently from borrower to borrower. For example, Black graduates are on loan repayment compared to their white peers . And their total debt is likely to be higher鈥攁n for a bachelor鈥檚 degree. Women are forced to finance advanced degrees just to close the , ultimately earning鈥攅ven with a master鈥檚 degree鈥攚hat a man in the same role would earn with a bachelor鈥檚 degree. For roughly , financing their pursuit of higher education is not a step toward the American Dream, but a roadblock. While have been floated, like canceling $10,000 for every borrower, or deciding forgiveness-based income thresholds, none have been instituted to date.
On a larger scale, student loan debt can also vary significantly from state to state. analyzed household debt statistics from the to understand how the average amount of student debt has grown across all 50 states.
States are ranked by percent change in student debt per capita between the fourth quarter of 2003 and the fourth quarter of 2020, the most recent period available. The Federal Reserve calculates historical student debt per capita, meaning the state statistics are calculated based on total population rather than number of borrowers. Additional data for 2020 on average debt per borrower is also included.
