Household student debt on the rise

1 month 1 week 4 days ago May 18, 2017 May 18, 2017 Thursday, May 18 2017 Thursday, May 18, 2017 1:55:00 PM CDT in News
By: Evan Lachnit, KOMU 8 Reporter
loading

COLUMBIA - Student loan debt is higher than ever and student debt now accounts for nearly 11 cents of every dollar of debt for households. 

That is according to the Quarterly Report on Household Debt and Credit from the Federal Reserve Bank of New York. 

The report shows the amount of student loan debt per household has tripled over the last 15 years. 

1.34 trillion dollars of household debt comes from student loan debt. That is about 10 and a half percent of the total 12.73 billion dollars of household debt.

Overall, household debt surpassed the levels seen during the economic recession in 2008 in this latest report. 

Joe Haslag, who is an economic professor and Kenneth Lay Chair for economics at MU, says despite the rising levels of student debt, going to college is still worth the expense. 

Haslag says when you compare students who forgo four or so years of income to go to college to students who work right away out of high school, historical averages show students who went to college get a return on their investment. 

"The extra income earned by a college graduate converted into what it is worth today is about 600,000 dollars at least," Haslag said. "So if it costs a couple hundred thousand dollars to go to a university even, it would seem like it well it is worth it." 

Haslag said the student loan market does not work like most markets do. He also said he does not think the risk is properly included in the price of interest rates for student loans.

The Federal Reserve Bank of New York report said delinquency rates for student loan debt "are likely to understate effective delinquency rates because about half of these loans are currently in deferment, in grace periods or in forbearance and therefore temporarily not in the repayment cycle." 

"There is evidence from the Federal Reserve Bank of New York study which suggest that even liberal arts majors are getting a pretty good rate of return on their college experience, on average," Haslag said. 

He said based on the average returns seen, the real question is why more people do not go to college. 

"Of course that would alter the supply of college educated grads and probably drive down the wages that are earned by college educated grads and that college premium would begin to shrink if everyone got a university degree," Haslag said. "But right now you could make the case it is well worth going to an university." 

This comes as there is a proposed 2.1 percent increase in tuition for resident undergraduate students for all four UM campuses. 

 

 

More News

Grid
List
LAKE OF THE OZARKS - A St. Charles man drowned at the Lake of the Ozarks after suffering a medical... More >>
11 minutes ago June 29, 2017 Jun 29, 2017 Thursday, June 29 2017 Thursday, June 29, 2017 9:13:00 AM CDT in News
COLUMBIA - The City of Columbia tweeted in its page a reminder for Columbia residents that shooting fireworks is not... More >>
8 hours ago June 29, 2017 Jun 29, 2017 Thursday, June 29 2017 Thursday, June 29, 2017 1:15:00 AM CDT in News
COLUMBIA - The Columbia Regional Airport is almost fully equipped to handle to the increased traffic that comes with a... More >>
14 hours ago June 28, 2017 Jun 28, 2017 Wednesday, June 28 2017 Wednesday, June 28, 2017 6:45:00 PM CDT in News
COLUMBIA - The total solar eclipse is now less than two months away and people are beginning to plan. ... More >>
15 hours ago June 28, 2017 Jun 28, 2017 Wednesday, June 28 2017 Wednesday, June 28, 2017 6:10:00 PM CDT in Eclipse Planning
BYRNES MILL (AP) — An eastern Missouri man is charged with forcing his daughter to sleep in a dog crate... More >>
15 hours ago June 28, 2017 Jun 28, 2017 Wednesday, June 28 2017 Wednesday, June 28, 2017 5:35:10 PM CDT in News
KANSAS CITY (AP) — University of Missouri System officials are no longer counting on state funding to help build an... More >>
16 hours ago June 28, 2017 Jun 28, 2017 Wednesday, June 28 2017 Wednesday, June 28, 2017 5:23:00 PM CDT in News
COLUMBIA - Two big questions still loom in the case involving a Missouri State Highway Patrol trooper and a man... More >>
16 hours ago June 28, 2017 Jun 28, 2017 Wednesday, June 28 2017 Wednesday, June 28, 2017 5:21:00 PM CDT in News
JEFFERSON CITY - The FEMA Disaster Recovery Centers in Linn, St. Robert, and Ellington will close permanently on Saturday, July... More >>
16 hours ago June 28, 2017 Jun 28, 2017 Wednesday, June 28 2017 Wednesday, June 28, 2017 5:18:00 PM CDT in News
JEFFERSON CITY - A special task force aimed at evaluating transportation in the state and addressing funding issues met Wednesday... More >>
17 hours ago June 28, 2017 Jun 28, 2017 Wednesday, June 28 2017 Wednesday, June 28, 2017 3:58:00 PM CDT in News
CLAYTON (AP) — A jail inmate who escaped from a hospital has been arrested at a mobile home park in... More >>
18 hours ago June 28, 2017 Jun 28, 2017 Wednesday, June 28 2017 Wednesday, June 28, 2017 3:20:00 PM CDT in News
COLUMBIA - Boone County is heading east. 75 county officials will travel to Maryland this fall to train with... More >>
18 hours ago June 28, 2017 Jun 28, 2017 Wednesday, June 28 2017 Wednesday, June 28, 2017 3:08:00 PM CDT in News
COLUMBIA - Boone County sheriff’s detectives arrested a second suspect Wednesday morning in connection with a shooting that wounded two... More >>
18 hours ago June 28, 2017 Jun 28, 2017 Wednesday, June 28 2017 Wednesday, June 28, 2017 2:50:00 PM CDT in News
KANSAS CITY (AP) — A Missouri man who spent nearly two decades in mental hospitals after entering a disputed plea... More >>
18 hours ago June 28, 2017 Jun 28, 2017 Wednesday, June 28 2017 Wednesday, June 28, 2017 2:26:00 PM CDT in News
FULTON — A 16-year-old girl is in critical condition after she was hit by a car Wednesday morning. Fulton... More >>
19 hours ago June 28, 2017 Jun 28, 2017 Wednesday, June 28 2017 Wednesday, June 28, 2017 2:00:00 PM CDT in News
ST. LOUIS — Ryan Ferguson has settled a portion of his lawsuit against police, nearly four years after his 40-year... More >>
20 hours ago June 28, 2017 Jun 28, 2017 Wednesday, June 28 2017 Wednesday, June 28, 2017 12:44:00 PM CDT in Top Stories
COLUMBIA -Multiple funerals took place on Wednesday at Sen. Roy Blunt's Columbia office. CoMo for Progress, a liberal group,... More >>
21 hours ago June 28, 2017 Jun 28, 2017 Wednesday, June 28 2017 Wednesday, June 28, 2017 11:30:00 AM CDT in News
KANSAS CITY (AP) — A Kansas City, Missouri , man is jailed on $150,000 bond after being accused of a... More >>
23 hours ago June 28, 2017 Jun 28, 2017 Wednesday, June 28 2017 Wednesday, June 28, 2017 9:43:53 AM CDT in News
CHARLESTON (AP) — A judge has dismissed an assault charge against a southeastern Missouri sheriff being investigated in the death... More >>
1 day ago June 28, 2017 Jun 28, 2017 Wednesday, June 28 2017 Wednesday, June 28, 2017 9:22:00 AM CDT in News
Columbia, MO
Broken Clouds 71°
10am 81°
11am 83°
12pm 84°
1pm 86°

Select a station to view its upcoming schedule:

Coming Up Next

7:00a
Today
11:00a
Rachael Ray
12:00p
KOMU 8 News @ Noon
9:00a
The Steve Wilkos Show
10:00a
Jerry Springer
11:00a
Jerry Springer

Tonight's Schedule

7:00p
Hollywood Game Night
8:00p
The Wall
9:00p
The Night Shift
7:00p
Supernatural
8:00p
Supernatural
9:00p
KOMU 8 News @ Nine on The CW
9:30p
Seinfeld