Executive Summary
College signals success, at least for those who graduate. Holding a bachelor’s degree is one of the best determinants of higher lifetime earnings, and college graduates are almost uniformly positive about the value of their degree: 98% of those making six figures and up say their degree has paid off, and even 63% of those making less than $50,000 agree (Pew Research Center 2014).
Yet, financing college presents unavoidable challenges for millions of Americans. Obtaining a degree is more essential than ever to advancing in a post-industrial economy. Yet continuing cost growth increases the risk of a debt trap—when obligations exceed earnings growth and disrupt the savings linked to a middle-class life-style.
Recent regulations, media attention, and economic concerns ensure continuing public attention to our college financing system. Three-hundred percent growth in outstanding student loans between 2004 and 2012 make this $1.2 trillion market a ripe opportunity for credit unions and a juicy target for policymakers. Whatever changes the process brings, leaders from all corners agree on the need to promote more financial awareness and personal responsibility among borrowers. Better decision making requires better information and better tools.