College tuition is rising at an annual rate of about 5 percent, but the average amount of debt per student for this year’s graduating class is up 8 percent over last year.
The average total of debt per student in the class of 2011 will be $22,900, according to Mark Kantrowitz, publisher of student-aid websites Fastweb.com and FinAid.org. This figure includes the loans parents took on to pay for their kids' education.
As of this past December, outstanding student debt totaled $530 billion, according to the Federal Reserve Bank of New York. Interest rates on student debt can be as high as those of subprime mortgages, according to the Wall Street Journal.
When compared to student debt rates from over a decade ago, the current rate is up by 47 percent, taking inflation into account.
In general, however, college remains a good investment: Employment rates and income levels of college graduates still outpace those of individuals without a higher degree. Based on 2009 data, the annual pre-tax income of households headed by people with at least a college degree outpaced that of individuals without the same level of education by 101 percent.
In addition, recent unemployment rates of college graduates was 4.5 percent, less than half that of high school graduates—9.7 percent.
Number of the Week: Class of 2011, Most Indebted Ever [Wall Street Journal]