As college debt rises, parents feel the pinch

It is a sign of the times: A new game show, “Paid Off,” debuted Tuesday offering winners not dream vacations or new cars, but a pile of cash to help lessen the crushing weight of their student debt.

The reach of America’s student loan problem — total debt is now about $1.4 trillion — is vast. Millions of people are in default, and many young people are graduating into adulthood facing payments that limit their ability to buy homes and to start families of their own. Some employers have even begun dangling student loan repayment benefits as a perk to potential workers.

A new analysis of federal loan data indicates that the average student’s debt load is plateauing, and perhaps even declining slightly, at least when adjusted for inflation.

That should be welcome news, except that it comes with a major asterisk: College has not become more affordable, but more students seeking bachelor’s degrees, especially at higher-cost colleges, have borrowed as much as they can under the federal loan program.

As a result, the analysis suggests, many parents are going deeper into debt to pay for their children’s education.

For students receiving bachelor’s degrees, the average debt load at graduation was $30,301 in 2015-2016, about the same as estimates for the previous three years, according to the analysis, which is based on data from the National Postsecondary Student Aid Study. The federal Department of Education’s National Center for Education Statistics conducts the study every four years.

Mark Kantrowitz, the publisher and vice president of research at SavingForCollege.com, ran the numbers. He believes the explanation for the flattening is that many students simply cannot borrow any more money through the federal loan program.

More than 40 percent of students in the 2015-2016 school year reached the limit of $31,000 for dependent students, up from 39 percent in 2011-2012. But some students — those whose parents cannot get federal parental loans, called PLUS loans — have a higher cap on how much they can borrow. (They can borrow up to $57,500, the same limit used for independent students.)

The percentage of all students taking advantage of the higher maximum loan amounts rose to 7.4 percent of those receiving bachelor’s degrees in 2015-2016, up from 5.8 percent in 20112012 and 3.3 percent in 20072008, according to Kantrowitz’s analysis.