Some of the nearly 14,000 students receiving degrees are among the estimated 40,000 people filling Alumni Park at USC.

Some of the nearly 14,000 students receiving degrees are among the estimated 40,000 people filling Alumni Park at USC for the 129th annual graduation ceremony. (Mark Boster / Los Angeles Times / February 11, 2013)

The student-loan market is not in a bubble and going into debt to pay for college is still worth it, according to a new report.

But those are the rare bits of good news in the otherwise dispiriting report on students’ escalating college debt.

While concluding that diplomas are worth the money, the study by Wells Fargo economists found that the payoff may not come for years because graduates are squeezed by several factors.

Tuition costs are rising faster than incomes. Graduates are having trouble finding solid jobs. And even when they find positions in their wheelhouse, some fields of study are relatively low-paying compared with the increasing debt students take on to secure their degrees.

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“Despite rising debt burdens, a college education still appears to be a clear factor in lifetime economic success,” according to the report. “Unemployment is notably lower for college-educated workers than for their less educated peers.”

But students may have to wait awhile to recoup their investment.

“Not surprisingly, educational debt is concentrated among younger households,” according to the report. “Household income, however, does not peak until ages 45-54, leaving younger households to await much of the economic return to the debt taken out decades before.”

Overall, the report found that the student debt burden is growing larger, weighing heavily on Americans of all ages and showing no signs of slowing down.

As other studies have concluded, college debt is rising even as Americans whittle away their mortgages and credit-car loans. Mortgage debt is down 13.3% since the fourth quarter of 2008 and credit-card debt is down 23%, according to the report.

Student loans now represent 8.5% of total household debt, up from 3.3% a decade ago, and is the second largest form of consumer debt after mortgages.

And even with scholarships and grants factored in, tuition and related expenses still are outpacing inflation.

Even the supposed good news -- that the student-loan market isn’t in a bubble -- isn’t as reassuring as it sounds.

The student-loan market isn’t in a bubble because, unlike the housing market a few years ago, the rise in college costs doesn’t appear to be a cyclical phenomenon, the report said. Rather, increasing debt appears to be a longer-lasting trend.

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Follow Walter Hamilton on Twitter @LATwalter