Student Debt Plateaus, but…

A new analysis of the National Postsecondary Aid Study in the New York Times shows that while there is good news– student debt levels are leveling off and perhaps even declining in inflation-adjusted terms– the reason for that is nothing to cheer about.

The good news: average student debt for those receiving degrees in 2015-2016 was $30,301, about the same as for the last three years. This despite rising college costs. Sounds good, right?

The bad news: Mark Kantrowitz of Savingforcollege.com crunched the numbers and concluded that the reason the debt level hasn’t increased is that students have been hitting the cap for Direct Student Loans, so additional costs are being pushed into other borrowing programs. Kantrowitz’ analysis shows that parent PLUS loan borrowing increased by 14% during the same period. And more than 40% of student borrowers hit the Direct loan cap of $31,000 over four years.

Because the report only deals with federal aid programs, it does not provide data on private loan debt.

Read the full article here.

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