Dive Brief:
- A report from the New Jersey Policy Perspective found ballooning student debt as a result of state spending changes since 2008.
- NJ.com reports the average undergraduate tuition costs in New Jersey grew by almost 24% between 2004 and 2013, when adjusted for inflation, and family income fell by 7% in the same time period.
- While New Jersey used to be known for charging high tuition but offering generous aid, funding cuts from the state have contributed to an inflation-adjusted 41% jump in average student debt from 2004 to 2013, according to the article.
Dive Insight:
Average student debt has been on a steady upward trend for a very long time in the United States. The average borrower in the class of 2015 owes $35,000 in student loan debt. That’s up from less than $10,000 in 1993. For a long time, when tuition rose, federal funding increased with it. When the financial crisis hit, state governments didn’t have as much money to give, but colleges and universities had high costs to support. In many states, students have faced the brunt of the squeeze. And, as average student debt increases, so does the rate of default as borrowers find themselves unable to repay.