What is the impact of student debt on recent graduates? Can it even be measured? At what point do the benefits of a good education begin to be overshadowed by the rising mountain of debt?
- According to a recent poll, the average college student graduates with over $30,500 to be repaid on student loans and that is roughly $274 per month.
- Graduate students graduate with over $49,000 in debt and make payments that are above $372 every month.
These monthly payments are just for the minimum required, less than half of all graduates pay more than the minimum monthly payment. Of these graduates, 34% have monthly payments which exceed 20% of their total monthly income, and of them over 87% make all the payments on their own with no help from other sources. HOW LONG CAN THIS GO ON? Where the average student will take from 5 – 9 years to pay off their student loans, a full 15% will take over 15 years to pay for a college education. That is why it is so important to discuss your options to pay back loans with your parent or someone at the financial aid office. Even with these options a clear 33% discussed a repayment plan with no one at all. Clearly whether you discuss your options or not, over 53% of all college graduates found their lives to be harder now that they face the burden of paying off their student loans.
SOME OF THE MOST COMMON CUTBACKS The most common cutbacks that graduates are facing in order to pay back their student loans include…
- EAT OUT LESS
- SPEND LESS ON CLOTHES
- FEWER VACATIONS
- GO OUT LESS OFTEN WITH FRIENDS
A clear 75% of all college graduates feel it is very deceptive of college recruiting offices to play down the true cost of getting an education. They feel that colleges and universities play down the cost during recruiting while upselling the financial rewards and benefits they will receive from having a college degree. Another 59% agree that higher education is becoming limited to the very rich who have the means and can afford it. Loss of lifestyle for the average family that has to pay for school can mean real hardship, and sacrifice for many, many years. When it came right down to it, a good 25% said that if they had to do it all over again, they would not go to school if they had to take out a loan.
BOTTOM LINE For many students the cold hard facts are that it may not be worth going to school if you have to take out loans to do it. The crushing mountain of debt that most people leave school owing is a sever burden that can be crippling to some and near impossible for others to repay. Weighting the options between repaying student loans for 5 – 15 years after graduation is one that will leave you asking if all this is worth it, and will you ever be able to do all the things you had hoped to do will you are still young.
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