Dec 11, 2014
Students & Debt
Student loans are a common way to fund education, specifically college and graduate school, and they provide educational opportunities that you otherwise may not be able to afford. But in many cases, college graduates are left with a diploma and an enormous financial burden of credit card and student loan debt – and maybe no job in sight. With Americans owing an estimated $1 trillion in student loans, it's important that you take control of your college debts today to protect your financial future. We can help.Get Help With Your Student Debt
Total U.S. Student Debt
Student Debt Accrued Every Second
Average Student Debt for a 2013 Grad
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When it comes to finances, college can be a time of worry and increasing difficulty. In order to concentrate on your education, while also enjoying your extracurricular activities, you need to understand the impact of your financial decisions, how to budget and manage spending.Read More
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For you and many students like you across the country, graduation from college does not come with a job. It can come with a pile of student loan debt. The average borrower in the college class of 2013 is expected to carry more than $35,200 in student loan debt, which may be accompanied by growing credit card debt, as well as an auto loan and maybe even a mortgage.
Did You Know?
The costs for a higher education are among the fastest-rising costs in American culture today. Since 1980, tuition costs at U.S. colleges and universities have risen 757 percent. In comparison, food and electricity costs have risen about 150 percent and gasoline prices have risen more than 400 percent over the same period of time. A college education is an important requirement for entry into many of the highest earning professions and jobs. How much you borrow, at what terms, and how you manage your student loan repayment can have a serious impact on your budget, your credit score and your ability to take out a car or mortgage loan in the future. If you or a family member are struggling with student loans, or have questions about your financial situation, speak with one of our skilled student loan specialists.
Student Loan Misconceptions
There are nearly as many misconceptions about student loan debt as there are ways to obtain and pay for it. Too often, college students rely on peers for advice on rules on responsibilities. In the process, a lot of half-truths or just plain misinformation is passed along.
Some of the more popular misconceptions regarding student loans include:
- It’s good debt. It is, if you get a diploma and job. Generally speaking, the total amount you take as a loan should not exceed your first-year salary.
- Loans automatically renew until I graduate. Loans typically are for one school year. If you or your family’s financial situation changes, your loan awards could, too.
- Federal and private loans are the same. There are many differences, some of them enormous. Interest rates, loan modification and forgiveness programs are examples.
- I can always just declare bankruptcy. Not to solve student loan problems, you can’t. Federal and private loans can’t be forgiven by bankruptcy.
Impact Of Student Loan Debt On Young People
The latest studies say that 70 percent of college graduates leave school with student loan debt that in 2014 averaged $33,000. That much debt at that age does not go away quickly and the impact of this is being felt in several areas, notably purchasing a home, starting a business and delaying marriage.
TransUnion released a study in 2014 that said student loans make up 36.8 percent of the total debt for consumers ages 20-29. A study by Harvard University’s Joint Center For Housing said that the rate of home ownership for people 25-34 has dropped eight percentage points in the last 10 years.
The burden of student debt is the key factor in young graduates not starting a business and the marriage rate for Millennials is down 12 percent from the previous generation.
The good news is that there is a considerable payoff for those who got the diploma. More jobs require a degree so there should be more opportunities; the starting salary is higher for college graduates and they can expect to make about $800,000 more over their lifetime than those who didn’t get a degree.
Trends in Student Loans
The soaring cost of college is slowing and the amount of student loans needed to cover it, is dropping, according to College Board, which conducts annual surveys on the matters.
College Board says the price of tuition at four-year, in-state universities went up 2.9 percent, the smallest gain since 1975. Per student borrowing is down 9 percent over the last three years. Scholarships and grants (free money!) now make up almost half (49 percent) of the aid students receive.
That is a positive trend. Sadly, it is dwarfed by negative trends over the last 10 years.
Student loan debt has soared from $260 billion in 2004 to $1.2 trillion in 2014; average debt jumped from $18,650 to $33,000; and the number of people over 60 with student loan debt tripled to 2.1 million. That group’s share of the debt has skyrocketed from $8 billion to $43 billion and five percent of them are having loan payments deducted from their Social Security checks.
Down the road, economists predict that student loan debt will affect choice of employment and delay home buying, opening a business, and when to get married and have children.
Thank goodness the news is good now!
Do you have credit card debt? You can pick options for lower monthly payments!