Department of Education: Student loan crisis may hit economy
In the third quarter of 2018, student loan debt reached an astounding $1.44 trillion, and the head of the Department of Education is worried that the “crisis around student aid” will eventually trickle down to the U.S. economy.
“It is more existing students taking on a lot more debt. It took 42 years for the student loan balance to grow to $500 billion -- it took 11 years for it to grow another $1 trillion beyond that,” Betsy DeVos, secretary of the Education Department, said Tuesday to Maria Bartiroma on "Mornings with Maria."
“The implications for our economy are staggering. More than $10,000 of someone else’s student debt for every single American taxpayer – 145 million of them.”
According to the Federal Reserve, in 2017 borrowers individually acquired an average of $20,000 and $25,000 in education debt. DeVos is not only putting the onus on Congress but also colleges and universities to look at policies in a “responsible way.”
“Students have to have more information about the debt that they’re assuming and understand the implications,” she said.
DeVos also said the Department of Education has created the myStudentAid app that not only aims to simplify the application process but also help students learn about and apply for federal financial aid on their phones.
“Students having more information at their fingertips will give them greater control over their futures,” she said. “And it will make them more informed about the decisions they make in taking on the debt initially.”