A college degree has been promoted as one of the safest investments a young person can make; if you go to school and earn a diploma, you can secure a stable job and build a life. But as tuition keeps increasing and repayment systems become more complicated, that dream feels less achievable. Today, national student loan debt stands at roughly $1.6 trillion.

The increase in student debt is closely tied to rising college costs. Research shows that from 1985 to 2014, undergraduate loan balances increased by more than $300 billion, mostly due to tuition. 

Debt also grows when repayment systems fail. Missed payments allow interest to build, expanding balances over time. Studies suggest that without the option of delinquency (missing a loan payment), total debt would be much smaller.

Repayment plans influenced by the income of the student offer some relief. These plans adjust payments based on earnings, which reduces long term accumulation of debt. Flexibility is critical for managing financial risk.

The rise in tuition also reflects a larger shift in who pays for college. State support for public universities has declined over the past few decades, so schools raised tuition to make up for the lost funding, shifting costs onto students and their families.

Even though tuition growth has slowed in recent years, it only comes after decades of large increases, which add up over time. Federal grants have not expanded enough to cover the gap, leaving loans as the main option for students.

Student debt is not just about personal choices, but reflects bigger decisions about public funding. It opens debates: Should society pay for education, or should students bear most of the cost? Right now, the system places a heavy burden on individual students.

For many students, the impact is severe and long lasting. Data from nearly 1,000 colleges shows that 2024 graduates with loans left school owing about $30,000 on average. Borrowing is highest at private nonprofit schools, followed by for-profits, with public universities slightly lower.

Even though fewer students borrow today than in the past, those who do decide to take out loans are forced to pay back a lot of money. About 10% of total student debt is at least 90 days past due. Defaults can hurt credit, lead to wage garnishment (when a portion of an employee’s wage is held to pay off debt), and remove access to certain federal protections.

Loans also affect life decisions beyond school. Borrowers may delay buying a home, starting a family, or saving for retirement. In cities like New York, some communities have seen particularly sharp increases in delinquency since payments resumed.

Still, higher education often increases lifetime earnings. The question is not whether to borrow, but how much risk makes sense. Low-income students often have no choice but to take loans to enroll in college.

A degree can open doors, but only if students finish their programs and enter fields that allow them to repay their debt. The bigger issue is whether the current funding system puts too much of the cost and risk on students.

As tuition rises and repayment rules continue to change, the cost of higher education is more than just paying for classes. It is about navigating a financial system that can completely change a graduate’s life for decades. Both students and families need to understand this system because the choices made today will affect their financial futures.