“Average debt load” is a lagging indicator

A friendly reminder from your math nerd blogger: “average debt load” of graduating students is almost always going to be substantially less than a new student will owe.  This is due to increases in tuition and fees that exceed inflation.

Using law school as an example, because I was just snarked down to about that, the most recent data available is from the Class of 2013.  (The Class of 2104 hasn’t graduated yet.) Those students were enrolled in law school from 2010 to 2013.  Law school tuition has increased by $4,000 – $5,000 per year.

Therefore, a student who is enrolled from 2010-2013 will be charged approximately $50,000 less than a student who is enrolled from 2014-2017.  As cost increases a few thousand dollars per year, the latter student will pay about $18,000 less for her first year than the former student did (2010 -> 2014 is four years * $4k or $5k/year); the same repeats for her second and third years of law school.

This is also why student loan debt continues to skyrocket; everyone is using data that is outdated, even if it’s the most recent data available.

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Filed under Academia, Economics, Law

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