A large number of American students are struggling to pay back their student loans. Among consumer debt categories, student debt ranks second only to mortgage debt. With a 157 percent growth over the past 11 years, this is the fastest-growing segment of household debt in the U.S. US problems cost trillions of dollars each year, and they keep on growing.
If you’re thinking about pursuing postsecondary education – or if you’ve already taken on student loans for college – these facts can be daunting. Postsecondary education may place a financial burden on parents whose children are considering college, or on themselves.
By the Numbers: The Student Debt Crisis in the U.S.
$1.5 trillion: The amount of student debt in the U.S.
44 million: The number of borrowers in the U.S. with student loan debt
2 million: The number of student loan borrowers with more than $100,000 in debt
What Students Should Know About Preventing or Managing Student Debt
Since college tuition is at an all-time high, it’s no wonder that more students are turning to student loans to buy their education. There are ways to ensure that student debt doesn’t become too heavy, even if most students graduate with student debt. Students can do a few things to ensure that they are taking on – and paying off – their student debt responsibly, whether they are a prospective student, current student, or graduate student.
Before applying for college
- It will be expensive to attend any post-secondary program. Are you sure you want to enroll in that program? You can take a gap year to focus both on your career goals and to save money if you don’t already have one.
- Filling out the FAFSA is the first step to determining how much financial aid you may qualify for.
- Be sure to research the school, the program, and the financial aid available. Ensure that you can afford the program before applying.
- Scholarships, grants, and work-study programs are available. You should borrow as little money as possible for school.
Research the best repayment option.
- Know your loan terms and the grace period for each. Loan requirements will vary depending on the type of loan.
- Prepay if you can. You should put any tax refunds or other windfalls toward your loans – and pay off the loan with the highest interest rate first.
- You should not ignore your loans if you cannot make your loan payment. Students who are unable to make their payments have a few options:
- Refinance your debt
- Consider a different repayment plan
- Consolidate your debts
- Get a deferment or forbearance
Disclosures
Securities offered through Securities America, Inc., member FINRA (www.finra.org)/SIPC/www.sipc.org), a separate entity. Lee Michael Murphy is licensed with the CaliforniaDepartment of Insurance, License 0H18660. Lee Michael Murphy is an Investment Advisor Representative with Securities America Advisors, a registered investment advisor The Free Retiree, Securities America Advisors, and Securities America Incorporated are separate entities. Career advisor Sergio Patterson, attorney Matt McElroy are not affiliated with Securities America Advisors or Securities America Incorporated. Securities America Advisors, Securities America Incorporated, and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation.