About 30% of people polled in a July survey by US News say they owe more than $ 30,000 in student loans. Unfortunately, although almost a quarter owe $ 10,000 or less, some owe significantly more. Over 11% say they repay more than $ 50,000 in student loans.
What many former students face, no matter how small their debt is, is spending years trying to pay off those loans. Respondents were asked how long they have been repaying their student loans, and here are the results:
- Almost two-thirds spent five years or less making payments.
- Almost 21% spent six to ten years paying off student loans.
- Almost 9% have been repaying loans for 11 to 15 years.
- Over 5% have spent more than 15 years repaying their student loans.
Considering the length of time, it’s not surprising that almost 38% have postponed buying a home and about 20% say they postponed their marriage due to the financial burden of student loans.
Find the best student loans for you
Are borrowers ready to start repaying federal student loans again?
- Over 35% say they would be able to pay bills and student loans.
- Over 41% say they would barely get by and need to cut their discretionary spending to make ends meet.
- About 23% say they would be unable to make payments without finding a new source of income.
When asked if survey respondents had taken steps to make paying off their federal loans a little easier, a quarter said they had done nothing.
Among those with federal loans who have taken concrete steps to improve their situation, here are the strategies used:
- Over 27% requested an adjournment or an abstention.
- About 28% had requested a rebate based on income.
- About 27% had requested a pay-as-you-go plan.
- Over 17% worked in an occupation where student loans are canceled.
Almost half of the respondents only have federal loans and more than a third have a mix of federal and private loans. About 17% only have private loans.
- Almost 30% have refinanced their student loans.
- Less than 29% have consolidated their loans.
- About 42% had done nothing to facilitate the repayment.
Some regret their decisions on university and student loans
As always, the hindsight is 20/20. When it comes to student loans, which can get complicated, it’s often hard to see the consequences of taking on long-term debt. Yet over 28% say they would make the same decisions about their education choices and obtaining student loans.
But others would like a recovery. Here’s what the poll shows:
- More than 19% say they would go to a cheaper school.
- Almost 23% would still go to the same school but pay for it in a different way.
- About 15% say they would still go to college but take no loans.
- Over 14% say they would skip college altogether.
The fact that so many people wouldn’t even go to college if they could turn back time makes it clear that high school students need more information so they can make the best choices for their future.
How to help students make informed loan decisions
The survey shows that many former students regret the decisions they made regarding the choice of school and the amount of loans. It is essential for parents, high schools and community organizations to educate high school students to understand the life consequences of taking out a student loan.
Here are five ways to help young adults make informed decisions:
- Talk about community colleges. Almost one in five regrets going to an expensive school. Make sure students understand that they can save money in the first two years by attending community college. After that, they can be transferred to the college of their choice to take the main courses in the field of their choice.
- Show them the numbers. Make sure they understand the concept of opportunity cost. For example, if they graduate with $ 30,000 in loans, the monthly payments will take years. This will impact their budget and they may have to forgo major purchases until they earn a higher salary.
- Look for average salaries. It’s good to encourage young people to choose a career that makes them happy. But we must also add a dose of fiscal reality. Help them research salaries in the field of their choice. If they still want to get loans, they will make informed decisions.
- Encourage them to cap the amount of loans. As a general rule, I recommend that the total loan amount does not exceed the average starting salary for the first year in your field.
- Explore business schools. The college experience is not for everyone. Many individuals prosper financially by choosing a trade or vocation that interests them. For example, there are programs designed to help build careers in website design and development, video game design, massage therapy, healthcare, carpentry, welding, and more.