A parent of two college-age students, angry about the soaring cost of tuition, once asked me, “Everyone talks about student debt, but is there a debt bubble building among parents trying to help their kids pay for college?” The short answer may be yes. A recent Pew report, citing falling median net income and a generation of current and future parents saddled with unprecedented borrowing, warned of an “intergenerational legacy of debt” that will put extra pressure on college affordability.
It is widely reported that total student loan debt in the U.S. stands at about $1.2 trillion and has more than doubled in the past decade, rising much faster than inflation. Average student debt stands at about $30,000, but this masks considerable variation. Graduate students and those at for-profit schools tend to owe more, for example.