As a result of funding cuts and host of other issues, the cost of college education in a public college has risen more than 50 percent since 1999 and for private colleges by 200 percent since 1987. Only 25 percent students who graduated from college had a student loan balance in 2003 and the average loan balance was around $10,648. Compare this to more than 43 percent graduates with college loans and an average loan balance of $20,328 in 2012. The rising college debt is expects to reach more than $11 trillion by the end of 2013 and second only to housing mortgage debt.
Things could get even uglier by July 1, 2013. The current federally subsidized Stafford loan rate is expected to double from its current rate of 3.4 percent to 6.8 percent unless the U.S. Congress intervened. According to some published reports more than 50 percent of student loans are held by households with a total net worth of $8,500. It could make life more difficult for young graduates who are looking for work as well as those who are already in the workforce. Unlike other debt such as credit card debt, student loans can’t be wiped out with a bankruptcy filing.