The Federal Reserve recently reported that student loan debt exceeded credit card debt and has reached 1.5 trillion dollars. According to financial aid expert Mark Kantrowitz, one in six graduates has debt that exceeds their income with the average student graduating with $37,000 in debt which can require over 20 years to repay.` Borrowing excessively is like having a mortgage without owning a home. Borrowers suffering the most are students who leave school with no degree or a degree worth little in the job market.
There are 44.2 million Americans with student loan debt averaging monthly payments of $381.00. For every dollar you borrow you will pay back two dollars. Students who graduate with excess debt are more likely to be depressed, delay getting married, having children, buying a car, buying a home and saving for retirement. Many have to return home to live with their parents to make ends meet.
The consequences of defaulting on a loan are garnishing of wages and income tax refunds; a negative affect on your ability to get a job or a house and exclusion of student loan debt from bankruptcy. You need to educate yourself and be an informed consumer of the loan process. Review the information on the federal website on loans at http://bit.ly/2J72GaC
Tips
- Do not borrow more than you need.
- Continue to apply for scholarships throughout college and apply them to your loan balance to decrease your debt.
- Consider attending a community college to reduce costs.
- Get a work study job on campus.
- Find out the requirements to become a Resident Assistant (RA) on your campus.