Here’s What’s Going on With Federal Student Loans


According to the American Institute of CPAs, there were nearly 39 million adults in the United States with student loan debt at the end of 2012 — a 70 percent increase from 2004. At an average of $24,803 per loan, the total amount of outstanding student debt was more than $950 billion, greater than the total of all credit card debt and second only to mortgages as a contributor to overall household debt.

This seems to be the function of two complementary problems: the fact that the cost of college has more than quadrupled over the past 25 years and that federally subsidized loans probably helped fuel the surge. Put one way, demand for a college education (real, perceived, or otherwise) has increased steadily over the past few years. The number of people attending college between 2000 and 2010 increased 37 percent, with much of the growth in full-time enrollment (compared to an increase of 11 percent in the previous decade).

There are no doubt shades of grey in this picture, but it doesn’t take a college education to see that when droves of applicants line up with cash in hand, colleges not only open up their doors but can also increase the cost of admittance with little or no repercussions.