Student Loan Debt: The Truth is Stranger than Fiction

7 | By Shah Gilani

Saying the cold, hard facts on student loan debt are frightening is like calling the Grand Canyon a ditch.

There’s so much on student loan debt that this is going to be a three-part series.

In this series, I’m going to tell you which facts are real and why some so-called facts are absolute lies. I’ll also dissect some presidential hopeful’s plans for free education – and why that will never happen.

I’m going to tell you what the real problem with student loans is, why no one wants to hear the truth, and what to do to fix the massive problem the country’s really facing.

But first, today, I’m going to break down the facts about student loans, and the numbers might be shocking.

So, be prepared…

Student Loans by the Numbers

The total outstanding amount of student loan debt in America is now more than $1.53 trillion.

How much more? Hold on, let me go to the student loan debt counter running on a website I follow.

As I write, the total is $1,531,812,082,400. It goes up about another $9,000 every 2-3 seconds.

Student loan debt is much bigger than credit card debt, which, as of Q3 2018, was $840 billion.

It’s bigger than auto loan debt, which, as of Q3 2018, stood at $1.21 trillion.

The only category of consumer debt that’s bigger than student loan debt is mortgage debt. That, as of the end of 2018, amounted to $10.3 trillion.

One in four adult Americans has student loan debt.

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That’s 44.7 million people out of the 171.3 million Americans ages 20-59, according to the Federal Reserve Bank of New York’s Consumer Credit Panel.

The oldest generational group with a huge student loan debt cross to bear is baby boomers – people over 50 years old, according to AARP this month, now owe $290 billion out of the $1.53 trillion pile.

That’s up from $47 billion only 15 years ago. Some of the rapid increase in baby boomers’ student loan debt comes from them taking out PLUS loans.

PLUS loans, the acronym stands for Parent Loan for Undergraduate Students, though students don’t have to be undergraduates anymore, are loans offered to parents of students enrolled at least half time, or graduate and professional students, at participating and eligible post-secondary institutions.

The average amount owed by bachelor’s degree recipients is $37,172. That’s the average for degreed students at the end of 2018, that’s up from $20,000 thirteen years ago.

We all know people with more than $100,000 in student loan debt, most of whom, at least the ones I know, earned at least one postgraduate degree.

The Federal Reserve Bank of Cleveland calculates the average monthly payment borrowers are saddled with at $393. They say that’s 55% more than 10 years ago.

Of all the student loans outstanding, 81% are federal loans and 19% are private loans.

According to the U.S. Department of Education: Direct loans, provided directly by the U.S. Department of Education and available to most students regardless of financial need, account for 77% of loans.

FFEL, Federal Family Education Loans, are indirect loans, provided by accredited institutions but guaranteed by the government, account for 22% of loans.

And Perkins loans, need-based loans of up to $5,500 a year for undergraduate students with very low household incomes (issued directly by the universities), account for a paltry 1% of loans.

The primary reason student loans are almost a necessity is that tuition costs have soared.

In 1971, the average cost for tuition room and board for one year at a public university was $1,410. In 2018 dollars, that would be $8,730.

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I know that’s accurate, because I went to UCLA in the early 1970s and my tuition, not including books, was about $708 a year.

The following figures, all in 2018 dollars so we’re comparing apples to apples, come from the College Board’s website at

In 1971, the average cost per year for tuition room and board at a public institution was $8,730. Today it’s $21,370.

In 1971, the average cost per year for tuition room and board at a private non-profit university/college was $18,140. Today it’s $48,510, a year.

To put those numbers in some frightening perspective, in 1971 the cost of one year’s schooling ate up 15.6% of a median income household, which back then was $9,027.

Today, public university tuition room and board for a year, at $21,370, eats up 34.8% of 2018 (November 2018) median income of $61,372.

And people wonder why defaults are rising on outstanding student loans?

I’ll give you those numbers and tell you why on Friday, and I’ll get into what some Democrats want to do about the problem.

So, stay tuned…



P.S. Student loan debt numbers aren’t the only ones that are shocking. There’s talk that a massive error has been made in many Social Security forms, leaving tens of thousands of individuals potentially missing over $20,000 rightfully owed to them. If you’re 50 or older, you could be one of them. Click here to find out.

7 Responses to Student Loan Debt: The Truth is Stranger than Fiction

  1. Darrell says:

    Really how about the way they calculate your interest I’ve been paying on a student loan for 20 years it’s barley half of what I owe I’ve paid more for cars at a higher rate and paid them off before and they were more money please explain that the loan is only 8.25 percent the other thing I’d why does a honorable discharge from the military have to pay for any interest at all on a student loan I barely made 7000. A year in the military and I worked 12 hours a day plus, why do I have to pay interest for a student loan???

  2. Jerry says:

    Since 1952 college tuition has gone up at TEN Times the inflation rate!

    Since the government has stepped in, the colleges and universities have built lavish campuses and administrations have given themselves massive raises and are massively bloated with excess staff at all levels. The students and their families are screwed.

  3. Patricia J Barnard, MSN, RN says:

    Thank you for the series. I graduated from Uniersity based nursing school in 1982. Total charges for 33 months of education, books, room and board was less than 2000.00. I recently completed my BSN and Masters degrees in nursing. From 2015 to 2018 when I graduated, I had amassed charges of 75k. Times sure have changed and education like health care has become a big money making machine. I am pursuing my doctorate and assume that I’ll be well over 100k in loans by then.

  4. Richard malmed says:

    I wonder how much of tuition goes to sports. I also wonder how professor’s salaries have gone up v. administrator’s . Much of the buildings expenses have been long ago amortized. where are these increases coming from? what would happen if all students were required to put in 12 hours work per week?

  5. Alan says:

    I don’t even know where to begin. My wife and I are friends with a couple that their daughter graduated from Hope college last year. She went there on athletic scholarship but it did not cover room and board. We went to her graduation and we were talking to her about her debt. Imagine her surprise when she got a bill for in November for her first payment due in December for $1100! on a side note, my daughter just graduated high school. She plans on going to college. We went to a college around us to listen to a prominent professor who is well respected in the field my daughter wants to study. We went there to listen to him and he wasn’t there! His graduate student was teaching while the professor was in his office writing a book! Btw, the the professor makes 150k a year and the graduate student makes 75k a year!

  6. William the Congaplayer says:

    As a tax person, I sometimes encounter people who took out student loans in the 1970’s and 1980’s, at the then properly government supported rate of 3% per year. Now, as life goes, some of these people took out loans, but they either: didn’t graduate, because of a) illness, b) accident, c) etc. They also moved several times.
    As a result the US Department of Education sort of lost track of them. Thus, they did not get billed for 40 years. Indeed, these were people that always filed a tax return, so it would have been an “easy peasy” job for the US Dept of Education to actually track them down. (You know: Soc Sec # on tax return- match it with Soc Sec # on Student Loan. The IRS does such matching of tax returns with W-2’s and 1099’s routinely and for at least the last 40 years.)

    Ok, now, it gets worse: A $10,000 student loan at 3%, taken out in 1975 will grow to about $32,600 by 2015.
    Indeed, the US Dept of Education is now contacting retired, semi-retired people living under the poverty level, making say $20,000 a year, and tells them you now owe us $32,600. Pay up!

    But wait, still worse: For those who cannot swing a sudden extra payment of $315 (over 10 years at 3%), their
    loans get farmed out to some type of robber-baron debt collecting outfit. These outfits raise the interest to
    9% and keep pestering. I don’t think it ought to be legal, but so far no poor person has the funds to legally challenge this “wonderful private-public partnership of public asses and private robbers”.

    But wait, it still gets worse: These outfits do not respond to inquiries and do not provide the common form
    1098-E, which shows the student loan interest these poor folks pay. So, these people get punished again.

    If government agencies could be sued under RICO, they should be. The Dept of Education would be first on
    my list. At the very least, this racketeering should be outlawed, and the loans should be re-set to the reasonable 3%.

    Next, while loan forgiveness is not easily to come by, I’d say that for any loan where the borrower did not graduate, and did not obtain a job in the field of study, the loans should be
    a) reduced by a third
    b) the college providing the socalled “Trump-style-useless” education should be made to pay one third of it,
    c) The student/borrower should pay the last third, at 3% per year.

    Why do I say that? Because I am practical, and fair is fair. If colleges were working under the threat of having to repay at least a third of student loans given to drop outs, then may be they’d be more careful with their “education racket”. Maybe this will make colleges shake in their boots, but it seems fair. Plus there are
    solutions for this: Because, if a farmer takes out a “seed loan with insurance” and the “harvest gets either burned up, or hit by some disease, or flooded out”, then they don’t have to pay back the lost harvest loan. Or,if you buy a new car, or even a used one with warranty, and it turns out to be a lemon, then
    you have rights, and don’t have to pay for something that is crappy.” Do you get the comparison? I do!
    The same concept, the same principle should be applied to student loans. Only really mean people, such as
    Republicans and a few Democrats as well, will pretend not to understand this, because they are making money off of other people’s misery.

    And of course, robber-baron brides such as Nancy Devos should not be allowed to be running the Dept of Education, because her husband, who ran the Amway pyramid starter-kit scheme back in the day, illegally purchased her a job in the Trump administration. Because the average American does not want robber-baron’s to be in charge of government functions.

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