In what is now an annual ritual, a new crop of college graduates has been crowned the most indebted class in American history.
Students in the class of 2013 graduated with an average debt load of $30,000, according to an analysis by Mark Kantrowitz, publisher of FinAid.org. Adjusted for inflation, that’s roughly double the average amount of debt students graduated with 20 years ago.
A separate study released Thursday by Fidelity Investments painted a bleaker picture. The class of 2013 carried an average of $35,200, Fidelty’s study found, which includes credit card debt and money owed to family members. Half of all graduates with debt said in the survey that they were surprised at how much they accumulated.
“The number of graduates reporting surprise by the level of student debt they have accumulated is a big concern and shows that there is a considerable need for families to better understand the total cost of college,” Keith Bernhardt, vice president of college planning at Fidelity Investments, said in a statement.
Outstanding student loan balances increased to a total of $986 billion as of March 31, the New York Fed reported. Total student debt nearly tripled over the past 8 years.
Policymakers have warned about the consequences larger student loan burdens could have on the economy as a whole. The Consumer Financial Protection Bureau believes it will be a drag on the housing market, for example, because newly-minted graduates can’t buy homes with their student loan bills. The CFPB recently issued a report urging changes to help borrowers who are struggling to make their payments.
Sen. Kirsten Gillebrand (D-N.Y.) introduced a bill this week that would refinance federal loans to a lower interest rate, saving money for borrowers, but taking away a profitable revenue stream for the federal government.