Average student loan debt keeps rising. And, the nightmare of the student loan debt crisis won’t go away anytime soon. While statistics vary per state, you shouldn’t ignore student loan debt facts.
Read on to learn more about the state of student debt in our nation.
(Bonus Tip: Are you a recent graduate with a hefty handful of loans? If so, you are probably wondering what the next best step is for managing them after graduation. Not a worry! Skip the confusion and check out this super-equipped Graduate’s Guide To Student Loans and find out how you can easily understand your finances, repayment, and ways to manage life after college, here.)
Average Student Loan Debt: Facts on the Crisis
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Average Student Loan Debt Crisis Hits Record Highs
Here are the student loan debt facts, and they aren’t pretty.
Over the past ten years, the student loan crisis has reached staggering new heights. From 2007 to 2017, the total amount of student loans in the US climbed from $550 billion to $1.4 trillion.
Different states have different amounts of debt for borrowers, but the average student loan debt is $34,144 per person. Pennsylvania has the highest average, with $35,185, followed by New Hampshire with $35,143. Meanwhile, Utah has the lowest average student loan debt, with $18,810.
The amount of student debt is concentrated mainly in 10 states, mostly from the northeast. So, borrowers would face many difficulties in getting out of debt before mid-life.
Notably, it would take ten years for the average borrower to completely pay off a loan if they gave $396 of their income per month. Meanwhile, would take twenty years if they gave $200 per month.
And, with the rising costs of living and education, it’s becoming more difficult to keep up with repayments. Most of all, the average cost of college has risen more than 600% since the 1980s. On the other hand, family income has only risen by 200%.
If you’re having a hard time paying back your costly student loans, you should consider options. Borrowers can consider grants, deferment, or forgiveness programs for their outstanding balances.
(Bonus Tip: Are you a recent graduate with a hefty handful of loans? If so, you are probably wondering what the next best step is for managing them after graduation. Not a worry! Skip the confusion and check out this super-equipped Graduate’s Guide To Student Loans and find out how you can easily understand your finances, repayment, and ways to manage life after college, here.)
When Repaying Loans Is Not Enough
.@KennedyNation explores what people said they’d be willing to give up if their student loan debt were washed away forever. pic.twitter.com/CBj0bs9Bt9
— FOX Business (@FoxBusiness) September 15, 2017
Average student loan repayment obviously lags behind average student loan debt. Repayments can’t keep up with the number of new loans acquired per year. $10,358 is the smallest amount of total interest borrowers have to shell out, after 10 years of repayment. And, most people pay more.
High-interest rates and a lack of knowledge also worsen this crisis. Students take out high-interest loans at 8% or 9%. Worse, they don’t know how much debt they’ve acquired until they’ve finished college.
This student loan crisis shows that drastic changes to the country’s student loan repayment program are needed. It’s not just about loan management but finding a way to ease the average student loan debt of millions of Americans.
(Bonus Tip: Are you a recent graduate with a hefty handful of loans? If so, you are probably wondering what the next best step is for managing them after graduation. Not a worry! Skip the confusion and check out this super-equipped Graduate’s Guide To Student Loans and find out how you can easily understand your finances, repayment, and ways to manage life after college, here.)
Addressing the Student Loan Crisis
Right now, borrowers have various repayment programs which, although not perfect, could be very useful once utilized well. The improvement of the situation clearly involves two parties. The government and borrowers have to work together. But as we wait to hear from the other side, it is best to take what we have now and use it to our advantage.
Slow and uncertain progress is still progress. With extra hard work, your student loan will soon be gone. It is always nice to enjoy lemonades with no debt in mind.
What Options Do Debtors Have?
If you’re feeling overwhelmed because of the student debt crisis, don’t worry! You can turn to plenty of options
Is your current repayment plan eating up too much of your income? Or are you having trouble keeping up with payments? Consider changing to an income based repayment plan, or an income sensitive repayment plan.
You can also try a pay-as-you-earn repayment plan.
Additionally, you can consider student loan consolidation. It might make repayments easier.
You can also weigh the option of entering a career providing student loan forgiveness.
Really, if you think about it, you have a lot of choices on dealing with student debt!
Watch this video from The Dave Ramsey Show for more insights on how the student loan debt crisis:
Average student loan debt continues to worry a lot of people, as it should. If left unchecked, your student debt can trouble you for the rest of your life. So, arm yourself with knowledge to save you from a lifetime of repayments. Know about possible grants and career tracks for a financially-secure future. Student debt is getting worse, but you shouldn’t lose all hope. With the right information and plans, you can keep yourself from getting hurt by the student loan crisis!
What are your thoughts about the latest news on the average student loan debt? Let us know in the comments section below.
Up Next: Income Contingent Repayment Plan
Editor’s Note: This article was first published in October 2017 and has been updated for quality and relevancy.
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