Student Loan Debt Likely to Top One Trillion Dollars

Word on the street is that student loan debt is likely to top one trillion dollars this year.

Here’s what one trillion looks like: 1,000,000,000,000.

At a certain point, the word “trillion” is kind of meaningless. It stops being tangible, and just starts to represent “huge.” The rabbits in Watership Down called anything over four hrair: thousands. Rabbits only have four fingers; they couldn’t quantify any number past that.

And yet, here we are, having a discussion about the number “trillion” — which is still kind of intangible, but also represents very real debt that’s going to need to be paid back by students (or the parents of students) who are trying to get by in an economy that’s still in spasms.

According to the linked story above, the average student loan debt load is around $24,000, and takes about 20 years or so to pay off. What that number doesn’t include or take into consideration is the ancillary credit card debt that covers college expenses (books, pizza, re-buying books ruined by pizza grease) and life in general.

What’s likely to push student loans into the trillions is House-proposed cuts to the Pell Grant Program, a grant based on the student’s financial need. As the cost of education continues to increase, and considering the current state of the economy, there are now far more Pell Grant-eligible students than there are Pell Grants. As Mark Kantrowitz wrote in a Huffington Post blog article, “The proposed cut in the maximum Pell Grant would mean that 1.7 million low-income students would no longer qualify for the Pell Grant, almost a fifth of current recipients. The remaining recipients would have their Pell Grants cut severely.”

There’s an expectation — right or wrong¹ — that higher education comes with a steep price tag, and once upon a time entry-level careers took that debt load into consideration when offering salaries to graduates. While every other aspect of the economy has tightened its belt, however, the price of an education shows no signs of rethinking its growth, leaving students with higher debt loads and no clear plan to pay it back.

Which brings us back to $1 trillion dollars — a one followed by way too many zeroes — and no end in sight.

¹ Wrong, if you ask this writer.