NEW YORK (MainStreet) — The amount students are borrowing to pay for their four-year college degrees is rising across all income levels, increasing their debt burden before they have even landed a job.
A 2014 analysis conducted by the Pew Research Center showed that from 1992 to 2011 and across all four income groups - low income, lower middle, upper middle and high income, college students are borrowing more money. The standard amount of cumulative student debt for their undergraduate degree increased from $12,434 for the class of 1992-93 to $26,885 for the class of 2011-12 (figures adjusted for inflation).
By 2012, “a record share of the nation’s new college graduates or 69%” had used student loans to finance their degrees and the “typical amount they had borrowed was more than twice that of college graduates 20 years ago,” the report said.
Even Wealthy Families Need Student Loans
What was startling is that the Pew Research Center analysis found that even graduates from more affluent families are borrowing even more money compared to low income families.
“Fully half of the 2012 graduates from high-income families borrowed money for college, double the share that borrowed in 1992-93,” the report said.
Both income groups are increasing their borrowing, but vary on their patterns. Students from higher income families borrowed money at a faster rate while a higher proportion of low-income students is graduating with a loan balance. The report found that 77% of low-income students graduated with debt in 2012, compared with 50% of their wealthy peers. Just 20 years ago, only 67% of low-income graduates needed to borrow money for college.