The Wall Street Journal‘s Number of the Week this week is $22,900 — the average debt among college students in the class of 2011.
The sum gives this year’s graduating class the distinction of having the most debt of any graduating class in history. The total price tag for college grads this year is an 8% increase over last year, and a 47% increase from a decade ago.
So, how did they get there? Well, start with the fact that tuition rises, on average, at an annual rate of about 5% a year. Add in the fact that, thanks to the economic crisis, there are more parents today who are cash-strapped and thus less able to help their children foot the bill. Those two factors result in an unfortunate reality for college grads who will be paying off their degree for a long time to come.
As the WSJ notes, in the long run, investing in a college education is generally a smart move, one that is likely to pay off more than a new car or home.
Further proving that point is the number of college grads who find work. This year as the nationwide unemployment rate has hovered near 10%, the unemployment rate among college graduates has stood at a much lower 4.5%. Which is especially noteworthy when you compare that rate with the unemployment rate for those with only a high school diploma (9.7%) and those who never finished high school (14.6%).
Still, debt is never a fully rosy story. Student debt can carry interest rates as high as subprime mortgages, making them an obligation that can be more demanding and long term than even credit cards and home loans, says the WSJ.
Hope that art history degree was worth it.