Student Loan Debt Reaches Record High, Continues to Anger Consumers


In 2010, President Obama pledged to raise the percentage of 25 to 34 year olds who hold an associate’s degree or a bachelor degree from 40% to 60% by 2020, creating an additional 8 million graduates. On the 2012 presidential campaign trail, Rick Santorum, a candidate for the GOP nomination, called President Obama a “snob” for wanting “everybody in America to go to college.” Overall, though, only about 30% of the US population has a college degree.

Given the fact that the cost of a college education has soared – up 130% over the last 20 years at public universities according to data from the College Board – the appropriate question to ask is can Americans still afford college, and is a degree worth the cost?

 Americans have had to borrow more and more in order to pay for higher education. In fact, recent analysis from the New York Federal Reserve reported that Americans now owe more in student loans than in credit card or auto loans. The NY Fed also reports that the average outstanding balance is $23,300, and almost 34% of borrowers are under the age of 30 – a demographic cohort that has been particularly hard hit by unemployment due to the recession.

And it is not just students who are borrowing at record rates. Another study, from the National Association of Consumer Bankruptcy Attorneys, found that loans to parents for their kids’ college education shot up 75 percent since 2006. The report finds that 17 percent of parents whose kids graduated in 2010 took out loans, at an average of $34,000.

With all of this financial strain on both students and parents, it is not surprising that conversations about student loans and the inevitable student debt are mostly negative. ORC Social Buzz (powered by Infegy’s Social Radar) shows that in the last six months, 45% of student loan-related mentions have been negative.

Sentiment: Student Loans (6 Months)

Source: ORC International

What’s currently preventing sentiment from dropping even lower is the introduction of the Student Loan Forgiveness Act of 2012, which if passed, has the potential to ease the financial burden for student loan borrowers. In addition, a petition in favor of the Act called “Want a Real Economic Stimulus and Jobs Plan? Forgive Student Loan Debt!” has been making the rounds online and reblogged or liked over 8,800 times on Tumblr alone.

Interestingly, Sallie Mae is the only student loan provider that makes the list of leading conversation drivers as they relate to student loans. As you would expect, the vast majority of mentions are very negative; positive sentiment for Sallie Mae is a lowly 37% and while it is not the only student loan provider, it is getting the brunt of consumers’ ire.

Conversation Drivers: Student Loans (6 Months)

Source: ORC International

Overall, discussions about student loans have mostly taken place on blogs and microblogs in the last six months, with forums and image sites accounting for the smallest portion of mentions. Negative sentiment about the topic is similar on both blogs (45%) and microblogs (41%).

Source of Mentions: Student Loans (6 Months)

Source: ORC International

However, despite consumers’ frustration with their student loans and their skepticism about the price of a college education, study after study finds that, yes, it is worth the money. A report from the Georgetown Center on Education and the Workforce estimates that lifetime earnings for a high school graduate are $1.7 million, $3.3 million for a college graduate and $4 million for a Ph.D. The study also projects that there will not be enough college graduates to meet the number of jobs that will require a college education, underscoring the value of a college education.


Tags: , , , , , ,

Categories: Consumer, Financial Services

Author:John Delaney

John is a Research Director on the Emerging Technology Team at ORC International. He can be reached at john.delaney@orcinternational.com.

Subscribe

Subscribe to our RSS feed and social profiles to receive updates.

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: