With the student loan crisis showing no signs of improvement, there’s little to no light at the end of the tunnel for America’s debt-ridden graduates. As Statista’s Niall McCarthy notes, The National Association of Realtors say 45 million people across the U.S. are carrying student debt with a fifth of them owing $100,000 plus. Unsurprisingly, that is impacting home ownership and the Realtors say that 83 percent of people aged 22 to 35 who have not purchased a home blame their student debt.
The Northeast of the country is the worst affected and according to a CNBC report, 75 percent of New Hampshire’s graduates carry outstanding debt, the worst in the country, with the average amount owed $36,367. Utah has the lowest rate of debt and graduates there owe an average of $20,000.
The following infographic shows how third-level education in the U.S. has gone from being a dream to being a “debt sentence” for millions of American students.
You will find more infographics at Statista
Federal Reserve data shows that the amount of student loans stood at $480 billion in 2006 and by 2018, the debt mountain had risen to $1.53 trillion. The reasons for the debt are numerous and complex, but are likely to include increases in tuition costs, less students finishing their courses and the lingering impact of the financial crisis.
As a reminder, in a fiery resignation letter, Seth Frotman, who until Monday morning was the Student Loan Ombudsman at the Consumer Financial Protection Bureau (CFPB), warned that current leadership “has turned its back on young people and their financial futures.” i.e., loans are not being forgiven.
Frotman concludes the resignation letter with a warning that the “system is rigged to favor the most powerful financial interests.” He also mentioned millions of borrowers are “trapped in a broken student loan system”, by which he meant one in which borrowers are expect to repay their lenders:
In my time at the Bureau I have traveled across the country, meeting with consumers in over three dozen states, and with military families from over 100 military units. I have met with dozens of state law enforcement officials and, more importantly, I have heard directly from tens of thousands of individual student loan borrowers.
A common thread ties these experiences together — the American Dream under siege, told through the heart-wrenching stories of individuals caught in a system rigged to favor the most powerful financial interests. For seven years, the Consumer Financial Protection Bureau fought to ensure these families received a fair shake as they as they strived for the American Dream.
Sadly, the damage you have done to the Bureau betrays these families and sacrifices the financial futures of millions of Americans in communities across the country.
For these reasons, I resign effective September 1, 2018. Although I will no longer be Student Loan Ombudsman, I remain committed to fighting on behalf of borrowers who are trapped in a broken student loan system.
As for millions of the millennials who are financially wrecked with student loans and shitty jobs in the gig economy, and whose only hope was to get their debt forgiven, perhaps complain to the Fed and demand that during the next bailout their debt be monetized too.