U.S. Borrowers Carry More Than $1.3 Trillion in Outstanding Student Debt
10 Scary Student Loan Statistics
October 20, 2015Business Insider - Student debt figures can be truly terrifying. Some students -- and their parents -- borrow too much, repay too little and let debt block other financial goals.
1. U.S. borrowers carry more than $1.3 trillion in outstanding student debt
This amount, constantly ticking upward on a student loan debt clock, is mind-numbingly large. But students who make consistent cost-conscious choices can avoid contributing to that outsized number.
Determine early whether a college is affordable. Apply for scholarships and on-campus jobs. And consider a lower-cost online course or community college degree.
2. The average 2014 graduating cohort carried a student loan bill of $28,077
Paying back that $28,077 -- the average among 1,043 ranked schools submitting data to U.S. News -- could cost nearly $300 each month. That assumes a 10-year repayment plan and 5 percent interest rate.
Repaying based on income or stretching repayment over more years can reduce that monthly bill.
3. Borrowers entering repayment in 2012 have defaulted at an 11.8 percent rate
The good news is that this number, which is the three-year default rate, has declined in recent years, according to the U.S. Department of Education.
The bad news it that the consequences of default are high. They may include wage garnishment and heavy fees, among other repercussions. To climb out of default, debtors may consider rehabilitation or consolidation.
4. Just 41 percent of the class entering college in 2008 graduated in four years
5. Borrowers older than 60 owed $58 billion in student loans in 2014
Older borrowers can fast-track payments to tackle debt early. If they're still repaying parent loans, they have fewer repayment options than their children but can seek professional help.
6. Black and low-income public college students borrow more and more often
Low-income and minority students can research ways to reduce borrowing and choose the right college financial fit, but they may need to make an extra effort to tap their network of college-educated adults for guidance.
7. Parent PLUS borrowers defaulted at a 5.1 percent rate
Parents struggling with PLUS debt can work with their servicers to get an affordable plan. They may also be able to take advantage of one workaround to qualify for Income-Contingent Repayment.
8. Grad students borrowed a median $57,600 in grad and college debt
9. More than 2 million grads say student debt delayed their starting a business
While students may think that debt will delay their business plans, they have resources. Federal borrowers can get on plans that fluctuate according to monthly income and postpone payments in times of hardship.
10. Student debt is surpassing groceries as a primary expense for many borrowers
Debtors with an unmanageable monthly bill can look into income-driven repayment or consolidation to stretch the length of repayment or lower their monthly bills. Devising a monthly budget doesn't hurt either.
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