What Does Student Debt Look Like in Other Major Countries?

State of Student Debt in the United States.

Since 1985 college tuition has spiked more than 500%.  Student debt in the United States is at unheard-of levels.  The current student debt load for college students in the United States is at 1.5 trillion and counting.  Once the first nation in the world for producing college graduates with a four-year degree, the United States is now 12th, lower even than Russia.  Among the reasons for this decline are affordability and access.  College costs have ballooned far ahead of inflation. An education that in 1985, for instance, that costs $20,000.00 would today cost over $100,000.00.  With that level of cost only the rich can go to college without incurring an enormous debt load. The rest of us either take on student debt or we forego the college experience altogether.

Borrowing for College in the United States.

With the traditionally most lucrative employment opportunities on the wane and competition for them becoming ever more intense and living wage menial jobs virtually extinct, many people feel they have no choice but to take out loans to get their college degree.  Lately, we seem to be hearing about the student loan crisis with increasing frequency, and it is no wonder. In fact, according to a CNBC article from May 16th of 2019, “Nationwide, college student loan debt was $517 billion in 2006. There are more than 44 million borrowers who now collectively owe $1.5 trillion in student loans, according to the latest statistics for 2019.”   Of those borrowers, roughly 7 million are in default and being overwhelmed by debt is epidemic among millennials, as 40% who have student loan debt are in default. The increase in student debt load while wages have been stagnant for the better part of four decades is staggering and creates severe challenges when it comes to participating in the most common milestones of life.  

College Expense Elsewhere on the Globe.

The United States is certainly not the only country to produce college graduates with student loan debt, but they are at the top of the list for overall student debt load.  One main reason for this is that colleges in the United States need to keep raising tuition costs to cover expenses. In other countries, tuition is capped at a specific rate or is even not a factor; it’s free.

Canada.

Canadian college graduates with student loan debt will have their debt forgiven after 15 years.  Canada has a program, the National Student Loan Repayment Assistance Program, where the government steps in after 15 years and pays off the balance of the student loan.  Consider that the 15-year mark is only roughly the halfway point of most loan repayment plans that are offered in the United States. Additionally, Canada also provides student debt reduction programs that can significantly reduce the debt load.

England.

England is one of the countries that has placed caps on how much a university can charge per year.  That cap comes in at about 9,000 pounds or 14,000.00 in dollars. Even so, the student loan debt is growing in England, though not nearly at the rate that is seen in the United States.  Colleges in England generally charge at the maximum allowable rate, which contributes to their continued rise in student loan debt balances.

Sweden.

Swedish students still incur debt even though their education is free. The average debt load is less than 45 percent of the average United States college graduate, which equates to roughly 19 thousand US Dollars.  The debt incurred by Swedish students is typically for room and board but, even so, Sweden also helps to subsidize student living expenses, relieving their student population of the necessity of working to cover expenses, which means that Swedish students have more study time

France.

French students enjoy the luxury of state-funded college, but they still must pay the tuition of between $220 and $2200 US dollars.  Compare the costs of University education in the United States and lack of debt load upon graduation, and there is motivation to study.  In France, the majority of students do not have to take out loans for their college education. The result is a large population carrying degrees from world-class colleges.  

Germany.

The university system in Germany is entirely government-funded, meaning the students pay no tuition fees whatsoever.  However, like Sweden, France, and the rest – living expenses are not included, so many Germans work to support themselves while in college.  Still, the net result is little to no student debt among German college graduates.

Scotland.

Tuition for college in Scotland was eliminated by the Scottish Parliament in 2008.  However, living expenses need to be accounted for, and most Scottish college students are in debt for loans they took from the government to cover living expenses while at University. 

More Countries Offer Free College Education.

These are but just a few countries who offer free tuition for their college-bound populace.  Other countries around the world provide a free college education, among them Greece, Scotland, Denmark, and Argentina.

Free Tuition Is No Guarantee of No College Debt.

So, we see that even when college tuition is free, many factors come into play that make it necessary for a student to take out loans to subsidize their education.   Daily living expenses such as room and board are the most significant sources of these costs. Cost of living expenses vary from city to city where these universities are located and, in some countries, Sweden, for instance, such costs can be prohibitive unless you already live there.  In fact, because of the living expense concern in Sweden, roughly 80% of the student population graduates with some debt load.

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