The coronavirus pandemic has certainly made 2020 a year of revelational statistics, with soaring unemployment levels, record economic contractions, and of course the somber figures of infection rates and related deaths. Of course, the pandemic also rapidly changed daily life as we know it, with nationwide stay-at-home orders, business closures, and social distancing measures. As a result, millions of Americans have reverted to remote work, converting their homes into offices, gyms, and everything in between.
Another significant change as a result of the pandemic has been college students pivoting to remote learning in leu of on-campus, given the high infection rate associated with post-secondary institutions. However, taking a closer look at current state of post-secondary education in the US amid the pandemic, several other revelational statistics emerge to join the pot of dismal 2020 data.
It turns out, that 2020 also happens to be the year that the US exceeded in owing more than $1.7 trillion in student debt for the first time ever. According to Federal Reserve estimates, the third quarter of 2020 saw student debt increase by almost 4% compared to the same time a year prior, and when compared to previous decade, the statistics are even more startling: in the third quarter 2010, Americans owed approximately $845 billion in student loans – which means that in the last decade alone, student debt levels have increased by 102%!
In response to the alarming total, US lawmakers have proposed to the incoming Biden administration a series of student debt relief policies, but whether or not they actually materialize is unknown. While on the campaign trail, Biden had proposed a program that would forgive up to $10,000 in student debt for each year of community or national service for up to five years. Individuals that end up working in government, schools, or any other nonprofit setting would be automatically enrolled into the program as well.
Indeed, the Trump administration also took into account the soaring levels of student debt amid the once-in-a-century pandemic, offering a pause on student loan payments until January 2021. However, the latest $900 billion stimulus bill will not offer any such relief this time around, and as a result numerous graduates will likely face excess strain on their debt levels whilst navigating the already fragile labour market.
Information for this briefing was found via the FRED. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.