Collective student loan debt is at an all-time high. In fact, student debt has risen over 300 percent in the past eight years alone! According to the Project on Student Debt, the average total debt for a four-year college graduate is $24,000. With student loan debt now exceeding over $1 trillion dollars, the cost of a college education has never been more expensive.
Having second thoughts about going to college? Think about this: The average college graduate is twice as likely to find employment when compared to individuals who only possess a high school diploma. College graduates also earn over 60 percent more than those with only a high school education. What’s more, the lifetime earnings gap between high school and college graduates is over $800,000!
However, student loan debt isn’t the only debt that’s rising; the average credit card debt is also at an all-time high for undergraduates, with a median debt of a little over $3,000. 91 percent of undergraduates own at least one credit card, and of that number about 50 percent own four credit cards or more. The amount of collective debt has drastically increased over the past 20 years, with 7.2 percent of college students citing debt as the main reason for dropping out of college.
Studies show that high school students aren’t taught the basic principles of financial management and therefore do not possess a basic understanding of personal finance. Only 45 percent of teens know how to properly use a credit card, while just 26 percent of teens understand the basic principles behind interest and fees. Of all the students surveyed, 84 percent of undergraduates admitted they need more financial management education, and with that more than half said they would have preferred more financial-based education courses in high school. With student debt at an all-time high, the need for financial literacy has never been more important.
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