As more borrowers qualify for student loan forgiveness, incoming college freshmen are set to rack up $37,000 in new debt, report finds
Every
year,
millions
of
new
students
are
pumped
into
the
student
loan
system
while
current
borrowers
struggle
to
exit
it.
This
year,
the
Biden
administration’s
new
student
loan
forgiveness
plan
could
start
clearing
debt
for
millions
of
borrowers
as
soon
as
this
fall
—
just
as
incoming
college
freshmen
start
racking
up
new
balances
on
their
path
to
a
degree.
In
fact,
graduating
high
schoolers
who
are
going
on
to
a
four-year
school
will
rely
on
loans
even
more,
a
new
report
shows.
More
from
Personal
Finance:
FAFSA ‘fiasco’
could
cause
decline
in
college
enrollment
Harvard
is
back
on
top
as
the
ultimate ‘dream’
school
More
of
the
nation’s
top
colleges
roll
out
no-loan
policies
These
college
hopefuls
could
take
on
as
much
as
$37,000,
on
average,
in
student
debt
to
earn
a
bachelor’s
degree,
according
to
a NerdWallet
analysis of
data
from
the
National
Center
for
Education
Statistics.
Once
families
hit
their
federal
student
loan
limits,
they
often
turn
to parent
student
loans and
private
financing
to
be
able
to
send
their
children
off
to
college,
the
report
also
found.
How
student
loan
debt
became
a
crisis
Tuition
and
fees
have
more
than
doubled
over
the
past
20
years,
reaching
$11,260
at
four-year,
in-state
public
colleges,
on
average,
for
the
2023-24 academic
year.
At
four-year
private
colleges,
it
now
costs
$41,540
annually,
according
to the College
Board,
which
tracks trends
in
college
pricing
and
student
aid.
“Tuition
has
been
going
up
faster
than
inflation
for
decades
and
incomes
have
not
kept
up,”
said
Sandy
Baum,
senior
fellow
at
the
Urban
Institute’s
Center
on
Education
Data
and
Policy. “It’s
a
serious
problem.”
Without
financial
aid,
the
price
tag
at
some
four-year colleges
and
universities
—
after
factoring
in
tuition,
fees,
room
and
board,
books,
transportation
and
other
expenses
—
is
now
nearing
$100,000
a
year.
Because
so
few
families
can
shoulder
the
rising
cost,
they
increasingly
turn
to
federal
and
private
aid
to
help
foot
the
bills.
“Tuition
and
fees
is
less
than
half
of
the
total
cost
of
college,”
said
Ellie Bruecker,
interim
director
of
research
at The
Institute
for
College
Access
and
Success. “Students
will
still
need
financial
aid
to
pay
for
other
needs.”
How
families
pay
for
college
As
of
last
year,
the
amount
families
actually
spent
on
education
costs
was
$28,026,
on
average,
according
to
Sallie
Mae’s
annual
How
America
Pays
for
College
report
—
up
more
than
10%
from
a
year
earlier.
While
parent
income
and
savings
cover
nearly
half
of
college
costs,
free
money
from
scholarships
and
grants
accounts
for
more
than
a
quarter
of
the
costs,
with
student
loans
making
up
most
of
the
rest,
the
education
lender
found.
Scholarships
are
a
key
source
of
funding
for
college,
yet
only
about
60%
of
families
use
them,
Sallie
Mae
found.
Those
that
did,
received
$8,149,
on
average.
The
vast
majority
of
families
who
didn’t
use
scholarships
said
it
was
because
they
didn’t
even
apply.
Why
fewer
students
are
filling
out
a
FAFSA
As
of
April
12,
only
29%
of
the
2024
high
school
class
had
completed
the
FAFSA,
according
to
the
National
College
Attainment
Network,
a
36%
decline
compared
with
a
year
ago.
With
enrollment
deadlines approaching,
fewer
students
have
figured
out
how
they
will
pay
for
college next
year.
“Even
if
all
of
this
had
gone
perfectly,
the
financial
aid
system
doesn’t
have
the
same
buying
power
it
had
years
ago,”
Bruecker
said.
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