Inflation forces students to reconsider their education

Jhe financial trauma created by high inflation has permeated college campuses across the country, and new data highlights the sacrifices many students are being forced to make in this time of rising costs.

The rising costs of higher education have been felt for decades. According to an analysis of data from the United States Department of Education at Georgetown University, the average cost of an undergraduate degree, including room, board, and fees, fell from $9,307 in 1980 to $25,004 in 2019, a jump of 169%. Between the 2008-2009 and 2018-2019 academic years, tuition alone increased from an average of $17,045 to $24,623.

More recently, public four-year universities increased tuition by an average of 1.6% in the 2021-2022 academic year, but many schools increased tuition by as much as 5% for the 2021-22 academic year. upcoming academic year. recently conducted a nationwide survey of 1,000 college students to determine the impact of a 5% tuition increase for the upcoming school year on their education.

Asked how a 5% tuition increase would affect their finances in general, 91% of respondents said it would affect them somewhat (49%) or greatly (42%), while 9% said that an increase not affect them.

In order to compensate for a 5% increase in tuition fees, respondents said they would look to work longer hours at their current job (59%), get an additional job (47%), reduce expenses in leisure activities (46%) and to reduce their spending on food (35%). Among the most extreme responses, students said they would take out more loans (24%), drop some of their classes (17%), and even drop out of school altogether (5.6%). %).

“Given studies show that the majority of college dropouts do not end up returning to school, students who drop out due to inflation-based tuition increases will enter the workforce already in debt. , but without the accompanying degree,” the report said.

And speaking of student debt, a recent study by Bankrate found that there is currently over $1.7 trillion in outstanding student loans, with over 43 million Americans currently holding federal student loans.

The average undergraduate borrower has student loan debt of $28,400, with 92.3% of that debt owed to federal loans and 7.61% to private sources. According to Bankrate, student loans are the second most common type of consumer debt, behind mortgage debt.

The student loan debt problem was halted during the pandemic when the Coronavirus Aid, Relief, and Economic Security Act – also known as the CARES Act – sought to alleviate the financial hardship created by the crisis through a temporary halt in federal student loan repayments and collection activities. However, this is set to expire on August 31.

According to the US Office of Federal Student Aid, nearly 25 million direct borrowers are in forbearance, with more than 99% of those balances in CARES Act forbearance.

As of December 31, 2021, Connecticut had $17.5 million in federal student loan debt which is carried by 497,700 borrowers with an average debt of $35,162 per borrower. Across the border in New York, $92.7 million in federal student loan debt is carried by 2.4 million borrowers with an average debt of $37,678 per borrower.

“Paying for college isn’t getting any easier, and student debt can hamper borrowers’ ability to buy a home, get married or expand their families,” said Hannah Bareham, author of the Bankrate data study. . “Student loan debt can have a significant impact on a borrower’s mental health. Feelings of anxiety and stress can coincide with any long-term debt, especially if the debt interferes with the ability to meet important financial milestones, such as saving for a house or buying a car.

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