Students continue to get pummeled by large amounts of student debt. The record amount of student loan debt, coupled with the weak job market, has students wondering if their degrees will pay off.
According to data released on Tuesday by the Federal Reserve Bank of New York, total student loan debt among borrowers under 30 has doubled since the beginning of 2005 to $292 billion.
The average student loan debt burden for borrowers under 30 has risen 56 percent since the beginning of 2005 to a record $20,835 as of the end of March.
Overall student debt has risen 148 percent since the beginning of 2005 to $902 billion as of the end of March, according to the New York Fed.
According to a study released on Monday by Sallie Mae, the rise in debt could be partly attributed to colleges decreasing scholarships. 35 percent of families paying for college received a scholarship in 2012, down from 45 percent in 2011.
34 percent of families paying for college took out federal student loans this year, up from 30 percent in 2011 and 25 percent in 2009.
Now students are scared that their degrees aren’t worth the money. More employers have given 58 percent of all new jobs to workers age 55 and older over the past year, according to Dean Baker, codirector of the Center for Economic and Policy Research.
“The average starting salary for recent college graduates has dropped 10 percent to $27,000 per year, according to a recent Rutgers University study. It would take 11 years for a borrower with that salary and the average student loan balance of $20,835 to pay off his or her student debt, according to the FinAid loan calculator.”
Meanwhile, the unemployment rate among 20- to 24-year-olds was 13.7 percent in June, two-thirds higher than the general unemployment rate, according to the Labor Department.
There were 2.1 million unemployed 20- to 24-year-olds and 2.7 million unemployed 25- to 34-year-olds in June.
27 percent of recent college graduates who held full-time jobs in 2009 were working in jobs that did not use their specific skills, according to Drexel University.