American student loan debt has ballooned to more than $1 trillion and more than 7 million borrowers are in default, according to reports by the Consumer Financial Protection Bureau. This problem isn’t unique to the United States, though. College students in countries such as Britain and Japan are taking on student loans to finance their education. But the level of debt incurred by student borrowers in the U.S. is unmatched abroad, experts say.
High tuition at American universities is partly to blame, Jason Lum, founder of ScholarEdge, a college consulting company that works with students around the world, told U.S. News in a recent article.
“We have the most expensive system of higher education in the developed world,” Lum says. “Americans borrow more because they have to meet escalating college costs. For that reason alone, students in other parts of the world simply don’t need to borrow as much, or at all, for their education.”
Average tuition and fees at public colleges and universities in the U.S. was close to $8,400 in 2013-2014 for students studying in their home state and nearly $19,100 for those paying out-of-state tuition, according to data reported to U.S. News in an annual survey. At private colleges, the average sticker price is nearly $30,500.
By comparison, tuition is free at public universities in countries such as Argentina, Iceland, Norway and Sweden. Zero tuition does not equal zero student debt, though.
In 2012, approximately 900,000 Swedish students received help from their government totaling close to 22 billion krona, or nearly $3.5 billion, to cover fees and living expenses, according to annual reports. Roughly two-thirds of those funds were loans.
In Japan, an estimated $5 billion in student loans were past due in 2011, the Japan Daily Press reported. Average tuition at the country’s public universities is roughly $5,400, according to Japan’s Ministry of Education, Culture, Sports, Science and Technology.
The unpaid debt prompted a crackdown on poorly performing students. Nearly 600 Japanese students with poor grades were declared ineligible for student loans earlier this year by the Japan Student Services Organization, which administers the country’s student loan system, according to the Japan Times.
While tuition at public universities in Japan is considerably less than American colleges and universities, tuition in the United Kingdom is more on par with that in the U.S. Full-time students starting at a publicly funded university in the U.K. for the 2013-2014 academic year paid an average of almost 8,500 pounds, or close to $13,500, according to the U.K.’s Office for Fair Access.
Students in the U.K. can borrow loans for both tuition and living expenses from the government-run Student Loans Company, and approximately 958,000 students did during the 2011-2012 school year, according to an annual report from the company. On average, students borrowed close to $10,200 during that time frame.
The U.K. is an anomaly in Europe, though, Holly Oberle, a Colorado native who is enrolled at the Berlin Graduate School for Transnational Studies, told U.S. News.
“It is quite unfathomable for most Europeans that you would start your adult life tens of thousands of dollars in debt,” says Oberle, who researched higher education systems in countries such as the U.K., Hungary, Argentina and Turkmenistan for her book “College Abroad.”
While American student loan debt shows no signs of slowing down, some lawmakers are attempting to streamline the repayment process by taking a page from the U.K.
Monthly student loan payments in the U.K. are automatically deducted via a payroll withholding, similar to taxes or social security in the U.S. Graduates don’t start repayment until they earn 21,000 pounds annually, or around $33,700.
When borrowers reach that threshold, they pay a flat 9 percent of any income more than 21,000 pounds until the loan is paid in full or forgiven.