Growing Pile of Student Debt Poses Threat to Future US Economic Growth

The United States prides itself on the value it places on higher education.  The nation was recently ranked the fifth most educated country in the world, according to data collected by the Organization for Economic Co-operation and Development, using percentage of the population that has attained a tertiary education as their metric.  However, the data presents a more troubling story than it would appear at first glance.  When the OECD set its age range for the rankings, it was surveying the US population that fell between the ages of 25 and 64, yielding the 42% tertiary education attainment rate that places the United States so high in global education rankings.  However, if the age range is tightened to individuals between the ages of 25 and 34, which OECD uses to survey the “younger adults” population group, the US yields the same rate, 42%, and falls in the rankings all the way down to 14th.  The message here is clear: the United States may still be a leader in education, but it won’t be for long, as the nation is falling behind in the brains race.

Perhaps one of the biggest barriers to the United States keeping up with other leading nations in education its populace is the rapidly rising cost of higher education.  As shown in this analysis conducted by Bloomberg with data from the Bureau of Labor Statistics, the cost of college tuition in the United States has risen by a jaw-dropping 1,225% in the last 36 years – compared to a 279% increase in the consumer price index.  Higher education has been by far the most rapidly rising expense to American consumers in the past several decades, and it has left a massive burden on the shoulders of our country’s young population.

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While European countries are pumping out higher education at little to no cost to their students, thanks to state-subsidized public universities, American students are assuming student loans that will cripple their ability to contribute to the economy for years to come.  Mitchell E. Davis, the President of Purdue University, presents some more worrisome statistics in the Wall Street Journal, such as the fact that educational debt has become the second largest debt category for the American public, after home mortgages, and the fact that 25% to 40% of student borrowers report postponing major purchases such as homes and cars.  The most shocking statistic, for me at least, is this one: 45% of graduates age 24 and below are currently living at home or with some sort of family member.  Not only is this disheartening as a soon-to-be graduate, but it is troubling as a US citizen.  Young Americans are currently dragging down the US economy by avoiding major spending and by starting families later and later, they are dampening potential for economic growth.  The issue will continue to worsen as the pool of Americans with college debt grows, and will not be resolved until measures are taken to reform the higher education system and make learning more available to all citizens.

3 thoughts on “Growing Pile of Student Debt Poses Threat to Future US Economic Growth

  1. Zach Schoettle

    This is an interesting topic since the average student debt out of college is about 28,000 dollars. This debt and a poor economy has forced many students to rent apartments or live with their parents. Similarly, the poor economy has instilled in the younger generation an aversion to buying houses since the housing bubble has left a mark on the economy.

  2. Matthew Hillebrand

    It’s incredible how much tuition has increased. That is honestly the most astronomical statistic I have ever seen related to college costs. This change has obviously been a huge indicator of economic standing in the nation as well, since the CPI has only limped along at a pace slightly above 1/6th of tuition.

  3. Connor Matthews

    The amount of student debt is shocking and its really interesting to look at the effects it brings like the age of starting families. It makes sense that graduates are starting families later and later because they want to pay off their debt before they start the next chapter. Before reading this post, I had never seen the 45% statistic living at home – an extremely alarming number that needs to change in order to get the younger generations to start spending and buying homes.

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