Student loan debt has surpassed credit card and auto loan debt. Americans owe $870 billion in student loans, according the Federal Reserve Bank of New York. Randy Kangas, a University of Illinois budget analyst, says the timing is unfortunate since the need for a college degree is greater than ever. That’s because high-paying, low-skilled jobs are leaving the country, he says.
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“Manufacturing jobs where you hit a punch press or something like that, you can do that in China as well as you can do that here,” Kangas says.
Kangas says it’s not that the cost to educate students is getting higher. Instead, more of the cost is being shifted to students, since the state owes universities millions of dollars, he says.
“The problem is the state has more real needs than the capacity to meet those needs,” Kangas says. “That’s a big part of why tuition has gone up.”
More than one in four students who are now paying off the debt are delinquent and 56.9 percent of borrowers owe more than $10,000.