A bachelor's degree requires less in loans than a car
Automotive debt is at an all-time high with the average outstanding debt per auto loan at close to $33,000, about the cost of a nicely-equipped Chevy Malibu. However, there is no public outcry about the rising amount of automotive loan debt.
Student debt on the other hand, is a consistent topic in the news. Earning a college degree is a long-term financial investment that also provides benefits in the short-term. For about 60 percent of students in the U.S., loans are necessary to help finance the cost of higher education, compared to 85 percent of new car purchasers who use a loan.
What does the data say about student loan debt compared to automotive debt?
National data shows that average auto loan debt has surpassed student debt each year since 2001. As the cost of most products has increased over time, so has the cost of earning a college degree and buying a car.
Beginning in 2001, average debt for each of the two assets (education or a car) diverge with average automotive debt increasing rapidly while student debt increases a slower pace. It is no secret that both are rising, but automotive debt (a more common form of debt for a depreciating asset) is rising faster.
As of 2017, the average automotive loan was about 30 percent higher than the average loan for a bachelor's degree.