A recent report from the Pew Research Center shows a 15 percent increase in student debt since 2007, leaving one in five families in the U.S. with student debt.
According to the report, 40 percent of households with members younger than 35 owe debt.
A statement from left-leaning advocacy group One Wisconsin Now said the national student debt bill is at $1 trillion.
In a statement, Executive Director of the Institute for One Wisconsin Scot Ross said the damaging effects of student debt affect everyone in the nation.
“The trillion dollar student loan debt is not just a crisis for students,” Ross said in the statement. “It is literally standing between college graduates and their share of the American dream and a more robust economic recovery both nationally and, as shown by our research, in Wisconsin.”
Analiese Eicher, government relations director for United Council of UW Students, said tuition has increased in Wisconsin since the 1980s. Eicher said along with this has come a decrease in financial aid, forcing a majority of students to turn to loans.
According to Eicher, 71 percent of undergrads turned to student loans in 2010-2011 school year. This is a 50 percent increase from a decade ago, Eicher said.
“Because of this, students are graduating, on average, with $27,000 in debts,” Eicher said. “Twenty-five years ago, it was just $7,000.”
Eicher said by far, the increase in tuition is the biggest cause of student debt. Part of that is the increase in technology and labor costs, Eicher said. But still, general financial support for education has gone down, according to Eicher.
Another problem is wages have not increased with the cost of school, Eicher said. It used to be a student could work just one job and pay his or her tuition, but now even three summer jobs often do not provide enough, she added.
While Eicher said financial reasons play a part in an individual’s deciding whether or not to go to school, she said she feels ultimately students will make the decision to go because most jobs today require a degree.
“Students will do whatever they have to do to get the degree,” Eicher said. “That’s why we are seeing so many loans, and so much debt.”
Eicher said high student debt also causes new graduates to not be able to buy new cars or houses right out of school. Students that have recently graduated cannot invest in the auto industry or the home industry, which could be a contributing factor in these hurting industries, Eicher said.
University of Wisconsin System spokesperson David Giroux said it is important to look at student debt in terms of graduates and undergraduates. He added saying the average student graduate is $27,000 in debt is a misstatement.
“It is not that all students graduate with an average of $27,000 in debt,” Giroux said. “It is that of the students who graduate with debt, their average debt is $27,000. And many of the students who have higher amounts of debt are students that went somewhere other than a four-year public university.”
