MARKETWATCH: The student-loan trend that’s a cause of concern

Career College Central Summary:

  • The share of college graduates with more than $40,000 in student loans grew by almost 10 times in just 8 years, a new report shows.
  • In 2004, just 2% of student loan borrowers with bachelor’s degrees were holding $40,000 or more in student loans. By 2012, that share jumped to 18%, according to a report released Monday by the Urban Institute, a Washington-based think tank. The bulk of bachelor’s degree recipients with student loans have relatively manageable levels of debt that they should be able to reasonably pay off, but the growing number of undergraduate borrowers taking on high levels of debt is “a reason for concern,” said Sandy Baum, a senior fellow at the Urban Institute and the co-author of the report.
  • “The thing to worry about is what kind of information people have,” Baum said. “You should be able to get a bachelor’s degree without borrowing that much money. We need to ask questions about who is accumulating more debt.”
  • The highest debt burdens are still reserved for graduate students, whose degrees theoretically provide them with the means to pay off their loans. But a combination of rising tuition costs, the stagnant economy, students taking longer to finish college, and the recent growth in enrollment in for-profit schools is likely contributing to higher levels of debt among undergraduates, Baum said.

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