Your Federal Student Loan Debt: Are You The 1%?
Lately, federal student loan debt has become a hot button for many of us. College costs go up and students borrow more to get through – sound familiar?
It’s not just the federal loans, either. Tons of students also sign up for private student loans. The totals are getting high.
Student Loan Crisis
I just read an article by the Atlantic on the top 1% of student loan debt, including government and private loans. It’s quite an eye opener to the size of the problem that’s out there and growing.
You can take a look at the Student Loan Crisis article on Yahoo! Finance.
I want to point out a couple of things about the article for a few reasons.
First, the article isn’t all bad news. I found some great news right near the beginning.
Next, you’ll probably agree that educated people should pay more attention to math as you learn what students said about their loans.
Who Are The 1% of Student Borrowers?
If you are looking to find out where you fall, and if you are a 1% student borrower, here’s the figure: $150,000.
99% of students borrow less than $150,000.
And now for the good news. The median amount for student debt is a low $12,800. In case you are wondering, median means that half of all borrowers have student loans of less than the median, and half have more.
Take a look at your total, and if you are close to that amount, you are in plenty of company, and you probably won’t have too much of a problem paying it off.
Pay Attention to The Math!
I was a bit shocked by what the borrowers surprised them about their loans. Loans will suck your wallet dry, that’s for sure, but you should think about the basics when you get your federal student loan debt or a private student loan.
You can see the payment before your sign, and you can also see what your major will likely pay when you finish. These shouldn’t be surprises.
Another quick word of caution: unless you are a doctor, dentist or similar, you should never borrow over $100K for a degree, and typically you should be far below that amount.
That much debt will cripple your future unless you are in a high income profession.
If you have that much debt, you can get it paid off, it will just take longer, and require more focus.
How It Should Be
Changing how our federal student loan debt will take some time. You can find all kinds of proposals out there if you look around, but what is the right answer, or at least a fair one?
I think too many schools raise their tuition too fast. I also think we push too many kids to go to college when they would be happy with vocational training.
I live near a plumber who has his own business, no debt, and a great future. Why should he go to college, or his kids, for that matter? He seems to have a great idea mapped out and working.
Your federal student loan debt isn’t going to disappear overnight, but you can get it paid off if you work at it.
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