Class of 2015 has the most student debt in U.S. history

 Article Via: Market Watch May 9, 2015

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As college graduates begin to enter the real world this month, they can take cold comfort in the fact that just like the last several classes before them, they’ll have the most student debt in history.

The class of 2015 will each graduate with $35,051 in student debt on average, according to an analysis from Mark Kantrowitz, the publisher of Edvisors.com, a website that provides information to parents and students about college costs and financial aid. That’s about $2,000 more than their peers who graduated in 2014, though the share of students graduating with debt remained roughly the same as last year at about 70%.

A combination of stagnant wages, declining federal and state funding to schools on a per-student basis, and rising tuition has meant that families “have only two real choices” when it comes to paying for college: borrow more or try to send their kids to a cheaper school, said Kantrowitz.

“More of the burden of paying for school is shifting from the government to the students,” he said. As a result, students’ average debt at graduation is going up year after year, even accounting for inflation. “It’s like clockwork,” Kantrowitz said.

Mark Kantrowitz/Edvisors.com

Families looking to avoid saddling their college graduates with high levels of debt have a few options, Kantrowitz says. One is to start saving immediately, even if it’s just a year or two before a student plans to enter college. “Every dollar you save is a dollar less you’ll have to borrow,” he said. Families can also opt to pay tuition in smaller installments over shorter periods of time, instead of a lump sum at the start of the semester, which could help to reduce the need to borrow.

Still, only a systemic fix like increased federal funding for students and schools will stop the average debt from creeping up, Kantrowitz said. That idea is unlikely to take hold any time soon; Senate Republicans passed a budget earlier this week that would cut guaranteed funding for Pell Grants and reverse the growth in other programs aimed at helping poor students afford college, as part of a plan to cut more than $5 trillion in spending and balance the budget, the Washington Post reported Thursday.

“Increasingly we’re pricing lower and moderate income students out of a college education,” Kantrowitz said.