Average Student Loan Debt in 1990

Anyone who has attended high school in America has undoubtedly been bombarded with every scholarship application, student loan distributor, and a fair amount of army recruiters in the years leading up to their first college application. But has it always been this way? What would we find if we looked back to one generation to see what kind of debt new graduates were met with after walking across the stage? To observe a significant change while still staying in a culturally and financially recognizable decade, let’s look back a few decades to see what type of student loan debt new graduates were met with. In this article we shall see the average Student Loan Debt in 1990?

The average student loan debt for a new grad in 1990 was $6,760. In addition, yearly tuition rates in 1990 averaged out to about $3,800 per year. But other questions arise once we have these initial numbers. For one, from the perspective of college costs in 2022, this is an insanely small number; however, adjusting for inflation, today, that debt would equal $14,061 in student loans. Similarly, after adjusting for inflation, the yearly cost of tuition and fees in 1990 averaged out to $7,699 in today’s dollars. You can read more about these numbers and see organized charts, but it is clear that there were many. Below, we will briefly explore the multiple variables that affect student loan debt, both in 1990 and today. 

Average Student Loan Debt in 1990

What Affects the Average Student Loan Debt?

Inflation and Minimum Wage

As stated above, inflation is an important aspect when researching the student loan debt of earlier decades. Still, it is also a significant player in affecting the average student loan debt. As is expected, students having part-time jobs while working through school is as common today as it has been in decades previous. The federal minimum wage in 1990 was $3.80, equal to $7.84 today. Therefore, it is safe to assume that a somewhat indiscernible amount of money is taken off what that average student loan debt would be because, like today, students will have been working and attending school simultaneously. It could be a no-score draw, however, as working while in school is one of the most common reasons students take longer to complete their degree. One more semester would mean even more student loans after adding together all the fees and regular tuition.

Job Requirements and Career Placements

The 1990s was the setting, especially in America, for the beginnings of “degree inflation,”; or the creation of requirements for four-year degrees in jobs that had not previously required them. Once this rule was established, one must have had at least a four-year degree to be considered qualified for almost any official position. The next logical assumption is that this requirement will increase the number of people attending colleges and universities. With more students attending, and more room for outlying variables, the average student loan debt for students in the 1990s was undergoing unique changes. 

“Student Right-to-Know” Act of 1990

Extending the expected rate at which students would complete school became a national and governmental topic in the 1990s. It is focused specifically on student-athletes but was soon attributed to the entirety of the student body of any respective institution regardless of their extra-curricular activities. The “Student Right-to-Know” Act of 1990 required universities to disclose the graduation rates of student-athletes, including the number of years it took them to graduate with what was then considered a ‘four-year degree,’ regardless of the time it took to complete it. At this time, it was noticed that many student-athletes were not completing their college degrees or taking longer than what was socially expected of any college graduate, despite having scholarships provided to them for that purpose. So, though scholarships were involved, there was a sizable enough group of people not finishing their degrees in the expected amount of time, which led legislatures to require schools to prove they were providing the support attendees needed to get them through their degrees. 

Federal Aid and Grants

There are still more factors contributing to an analysis of student loan debt in the 1990s. So what did the numbers inspire? In Georgia, they inspired Zell Miller, the then state governor, to create the HOPE scholarship program, signed into law in 1993. It designates the proceeds of the Georgia lottery to students to reduce student loan debt and increase access to education for qualifying students. 

The 1990s was also ground zero for increased the number of unsubsidized loans from the U.S. government. Unfortunately, this quickly led to an increase in student loan debt overall, as unsubsidized loans began to take on interest far sooner than subsidized and trapped many graduates and their families in unwanted and seemingly inescapable student loan debt. 

Access to Education

As the access to education grows, the amount of money is required to keep colleges and universities running. It is not enough to account for the extreme increase in university costs, but there is still a need to provide services as more students apply to and attend schools. In addition, as the requirement for a degree became commonplace in most workplaces, an increase in student enrollment is to be expected. These two together create a situation where students will be required to pay if they want to survive in the professional world. However, colleges will still balance the need to provide services such as housing, food, libraries, &c., for attending students. 

Unfortunately, the 1990s is where for-profit methods of conducting college and university business began. Running schools as a business required higher enrollment, another reason costs increased, and student loan debt quickly followed.

Parting Thoughts

Extensive variables affect the severity of student loan debts every decade. When compiling information on the student loan debts of 1990 and the 1990s in general, it is essential to consider factors such as inflation and career requirements. In addition, the 1990s brought governmental and general social changes in the expectations of graduates during and after their time in a university. All these factors together contribute to school costs in 1990 and, finally, how much debt students had to take on to pay for those costs.