UNDATED (WRN) The amount of money students have borrowed for higher education in the US now exceeds $1 trillion, and a new report suggests that debt is causing a massive drain on Wisconsin’s economy.
The study by the Institute for One Wisconsin shows students who took some college but never finished face average monthly loan payments of $268, those with a bachelors degree pay about $350 a month, and students with a graduate level degree pay an average of $448. That leaves students facing an average loan payment of $388 a month after leaving campus.
Institute Executive Director Scot Ross says paying that money off can take well over a decade for most students. According to the study, bachelors degree recipients take an average of 18 years to repay what they borrow, while students with a graduate degree face an average of 22 years.With the debt hanging around for so long, Ross says those former students are left unable to exercise any purchasing power they may receive from entering the workforce. He says they avoid buying new cars and continue to rent, diverting the money out of Wisconsin and sending it to Wall Street banks instead.
Ross says reforms during the 1990s have essentially turned students into “indentured servants” for a higher education. He says the federal government needs to restore consumer protections for borrowers and the state should rethink how it funds colleges so students no longer need to borrow as much money to pay increasing tuition costs.