5 Student Loan Debt Statistics You Should Know

Written by adminAugust 27, 2018
Student Loan Consolidation

As of last year, Americans owed 2.5 times more student debt than they did a decade ago. That totals out to more than $1.3 trillion. It’s basic economic numbers. More young adults are going to college at a time when it’s more expensive than ever. Hence, the student loan debt piles up.

The problem is, it has become a major epidemic. Most young people go to college with the expectation of finding a career as soon as they graduate. But, having to tackle $50,000 worth of debt right out of the gate isn’t helpful.

The Pew Research Center has a lot of staggering facts about this American crisis. Perhaps sharing these will allow you to understand what’s going on and how to prevent it from taking hold in your life. Let’s look at 5 scary facts about student loan debt.

1) 40% of Young Adults Have Student Loan Debt

Between the ages of 18 and 29, about 4 in 10 former students are struggling with this problem. The rest either had a means of paying back their loans or didn’t go to college at all. It’s a fact that student loan debt is much less common with older generations. Only 4% of people over 45 reported having student loans.

It’s true that older adults have had more time to pay off their debts, so they have less. But, there’s more to the story than that. Millennials are really the first generation to take out a loan to pay for school at this degree. Nearly half as many students got a loan in the early 1990s. Most likely college was more affordable or they had a better plan for paying it off.

2) The Amount Owed Varies by Degree

As of 2016, the average amount of student loan debt held by each student was around $17,000. It’s quite obvious that different degrees require higher amounts of loans to be taken out. A quarter of all students owe $7,000 while another quarter have $43,000 in debt. Each level of degree obtained came with higher amounts of debt.

For example, students who had an Associate degree had $10,000 or less. Bachelor’s degree holders had around $25,000 in debt on average. Postgrad degree holders had over $45,000 in debt. 7% of all borrowers owe over $100,000. They’re most likely the future doctors and lawyers of the world.

3) College Graduates are More Likely to Struggle Financially

Here’s an interesting statistic. If you have a college degree and student loan debt, you’re more likely to struggle with your finances and hold down more than one job. That’s because paying back those loans is not an easy task. Loan payments can be nearly as expensive as renting a cheap apartment.

Also: http://financialhelpers.com/trump-administration-signs-massive-student-loan-forgiveness-bill/

Due to the last decade’s Great Recession, more students were leaving college without a plan and without a job. They were more likely to live at home while holding down two or more jobs. In contrast, young adults who didn’t go to college have a better handle on their finances and don’t need to work double jobs to support themselves.

4) College Graduates More Likely to Live in a Higher Income Family

For most people, getting a college degree is a major investment that should pay off later in life. The statistics bear that out. While it is true graduates struggle more right after college, once the degrees are paid off, they’re doing pretty good. Getting a bachelor’s degree or higher, while coming with higher amounts of debt, lead to higher income families.

5) Students with Loan Debt Less Upbeat

According to the Pew Research Center, students who used loans as a way to pay for college were less likely to consider their degree worth it. It’s easy to understand those who found higher value in their degree had their education paid for by someone else. If you have to spend the next decade paying off your education, you’re more likely to think it wasn’t worth it.

Only half of students with outstanding debt say it was worth the investment, while 69% who don’t have debt say it was definitely worth it.

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Millennials Get Angry When You Talk about Retirement

Written by adminMay 23, 2018
Saving

Money can be a touchy subject with millennials. This is the generation that is getting hit the hardest with disabling student debt, low wages, and the recession, which hit right as they were graduating college.

It wasn’t an uncommon sight to see someone in the mid-20s and lower-30s, with a college degree, living at home with their parents. Those who are making it, are barely doing so. High rent prices and the cost of living constantly outpacing their ability to get raises has made life difficult for most of our younger generations.

When the website MarketWatch wrote a piece about how much money 35-year-olds should have saved up (about twice their salary to be safe), the fury was intense. There were many responses of varying degrees, from righteous indignation to jokes to cut the tension.

The message was clear. Millennials SHOULD be saving their money, but they simply can’t afford to. We recently wrote an article talking about how Americans still can’t afford their basic needs. This is a growing problem as debt keeps piling on and wages remain stagnant. Many families still have to make tough decisions and what they can afford and what has to wait.

If you can barely afford to feed yourself, you’re not going to have enough to save, especially if you’re paying insane interest rates on loans just to keep your head above water.

The sad reality is, we can’t talk about retirement enough. This is a subject no one should pass up just because it’s a difficult conversation. No matter what we’re dealing with right now, we need to keep it a part of our thinking and budget planning. In fact, it should be a priority.

There’s no one-size-fits all approach to saving for retirement. What you’re going to need and when you’re going to need it will vary per person, but if you haven’t even begun to address the issue in your 30s, you’re in danger to fall well short by retirement age.

Social Security is dwindling and no one knows how much longer it will last. Many experts aren’t even sure what the future of the program will look in the next 30 years. It’s not a program today’s millennials can take for granted or expect to still exist. They will have no choice but to invest their own dollars into their retirement plan.

That starts now.

There are two things people can do to ensure they’re in a good spot.

The first is to save as much as you can. Ideally, you should be putting away 15% of your monthly salary. If that’s impossible, trying to cut back as much as you can. Even 5% saved is better than nothing. As the economy improves and your situation is better under control, you can up the amount you save.

The second way to better prepare yourself for retirement is to take care of your debt. Don’t keep adding more to it just because you want that shiny new car. If you know things are tough and you can barely afford to save, paying a large debt that’s mostly interest isn’t a good idea.

As of this writing, the government has put in place several programs designed to help people pay back their student loans. Most people who qualify for these programs can have what they owe significantly reduced, as well as the time it takes to pay back these loans.

The sooner you pay down your loans, the more money you’re able to save. Nothing is more important than your future and the future of your family. Paying off debts and having extra money to put away is only the first step into gaining financial freedom.

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