Student loan forgiveness expectations may fuel more borrowing, expert says
Although the fate of federal student loan forgiveness is up in the air, college students may be borrowing more for the coming year in part because of the expectation that their debt may get forgiven, recent research suggests.
With few families able to shoulder the sky-high tuition tab, students and their parents are increasingly leaning on student loans, according to Sallie Mae’s annual How America Pays for College report. Roughly half of families, or 49%, reported borrowing for college for the 2023-24 academic year, up from 41% the year prior. Sallie Mae surveyed 1,000 parents of undergraduate students and 1,000 undergraduate students ages 18 to 24 this spring.
Education debt, which now exceeds $1.7 trillion, is at an all-time high. Over the past 15 years, the total balance has more than doubled, even outpacing the rising cost of college.