The cost of college has risen so much that it’s almost impossible for many young Americans to go to college without a loan. Today, one in every four Americans has student loan debt. The Consumer Price Index recorded an increase of 63 percent between the years 2006 and 2016. And it did not stop at just a fee increase. Over the same period, college textbooks increased 88 percent, and housing jumped 51 percent, excluding board.
If you take out a federal student loan, you’re expected to pay off the amount in a decade. However, many students take far longer. According to OneWisconsin Institute, graduates from Wisconsin can expect to pay off a bachelor’s degree loan in close to 20 years, and a graduate degree will take even longer - 23 years. Many of these students expect to pay off their loans when they are in their forties.
The average monthly payment made to cover student loan debt is said to be close to $400 a month. Over a year this totals out to around $4,800. That’s a lot of money to shell out when you’re just starting your career.
Getting a first-rate education, which will hopefully translate into better opportunities in the workplace, is the dream of millions of young Americans. But chasing this dream could be handicapping you before you get out of the gate. And there’s another aspect to the stress of a large loan - the American Student Assistance Organization found that 40 percent of people with student debt found that it impacted their health. Worrying about debt has even been linked to depression, and worse.
Planning a brighter future by getting a college degree is a smart move, but look at ways to fund the degree without that debt. Do your research on college savings plans, grants, scholarships, and other ways to fund your education. And if you do take out a loan and find you’re struggling to repay it, get expert advice. It may be possible to refinance your loan. If you have a federal loan, it’s possible that you could be eligible for an income-driven repayment plan (IDR).
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