Is a Student Loan Crisis on the Horizon?
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Is a Student Loan Crisis on the Horizon?

Beth Akers and Matthew M. Chingos
Brown Center on Education Policy at Brookings, 2014
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Media reports suggest that mounting student debt in the United States signals a potential crisis that could slow consumer spending and threaten economic growth. Yet despite higher loan balances and more student borrowers, education policy researchers Beth Akers and Matthew M. Chingos say that the monetary benefits of a college education still significantly outweigh the costs of student debt. Though its conclusions may seem a bit too optimistic to those facing years of college loan repayments, getAbstract suggests this informative study to students and families.

Summary

Media reports about the high cost of college and individuals saddled with six-figure student loans lead to questions about whether the United States is headed for a student debt crisis marked by widespread defaults, taxpayer bailouts and slowing economic growth. While the cost of university education and student debt have ballooned since the late 1980s, the picture is not as grim as it first appears. Among borrowers who received bachelor’s degrees in 2011–2012, debt averaged about $26,000; only 4% of borrowers owed more than $100,000.

Nonetheless, the number and amounts of student loans have grown. Among...

About the Authors

Beth Akers and Matthew M. Chingos are fellows at the Brown Center on Educational Policy at the Brookings Institution, a nonprofit independent research organization.

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