The Student Loan Crisis Explained

Between 2001 and 2016, student loan debt increased nearly four times from $340 billion to over $1.3 trillion. Today, the collective student loan debt among Americans is well beyond the value of Microsoft and Facebook combined at an alarming $1.4 trillion. For many graduating students, this means lifelong debt, deferred loans, increased interest payments, and a shrinking economy.

For recent college grads, life after debt is a frugal one. Young people are spending less on discretionary purchases, in lieu of meeting demanding loan repayment plans, often reaching nearly $400 a month. For Gen Z graduates in particular 77% of them struggle to keep up and are forced to defer their loans, further increasing interest. Federal loan forgiveness is a powerful concept, not just for college graduates but for the economy as a whole. Cancelling all student loan debt would increase the GDP by up to $106 billion per year, add 1.2 million jobs to the economy, and allow consumers to participate in economy spending of goods and services, rather than allocating huge portions of their earnings to paying off enormous student loans.

This infographic details the current state of student loan debt demands, how it’s hurting the economy, individuals, and what we can do now to prevent a future collapse.