Despite years of skyrocketing prices on everything from textbooks to tuition and backbreaking loads of student debt, many Americans still see a college education as very important in today’s society.
According to a recent Gallup poll, 70 percent of Americans believe that a college education is very important, up significantly over the past few decades. Only 6 percent of respondents said a college education was not too important. In comparison, just 36 percent of Americans considered a college education very important when Gallup first asked the question in 1978.
“The importance Americans place on a college education is particularly relevant as questions arise concerning the relationship between the cost of a college education and its value,” said Gallup. “Additionally, various studies and anecdotes from recent college graduates lament the soft job market for Americans with a college degree. At the same time, the high value that Americans place on a college education may reflect evidence that Americans with college degrees earn significantly more over their lifetimes than those without degrees. Or the perceived importance could be a nod to the effect of the new ‘knowledge economy’ that often leaves young Americans without degrees unable to compete for jobs.”
The perceived value of a college education is slightly higher among in the 18-29 demographic, but the need to analyze the benefits and costs of attending college is higher than ever. College graduates who borrowed for bachelor’s degrees granted in 2012 had an average student loan debt of $29,400, according to a report from the Project on Student Debt at The Institute for College Access & Success. Furthermore, 7 in 10 students had college debt upon graduating. From 2008 to 2012, average debt (federal and private loans combined) increased an average of 6 percent each year.
In November, the Federal Reserve revealed that the total outstanding student debt increased $33 billion in the third quarter to reach $1.03 trillion. While other organizations have already measured college debt to be above the trillion-dollar mark, this is the first time in history the Federal Reserve has done so.
In addition to student loans officially crossing the $1 trillion level, the New York Fed reported that the number of borrowers who have fallen behind on their student debt by at least 90 days increased nearly 1 percentage point to 11.8 percent in the third quarter, compared to 10.9 percent in the second quarter. The delinquency rates on auto loans and mortgages stood at only 3.4 percent and 4.3 percent, respectively.
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