The Nation is drowning in student debt
As the rate of student loan debt continually rises, paying for college has become a hot discussion topic for politicians and pundits alike, but what is the real state of student loan debt in America? Unfortunately, our country’s collective personal debt situation proves worse than many realize.
The most recently published National Financial Capability Study (NFCS) reports that more than a quarter of adults aged 35 to 54 have student loans—a number which has nearly doubled from 23 million to 43 million in the past 10 years. As the number of borrowers continues to rise, the number of those behind on payments has simultaneously risen as well. In fact, the NFCS finds that 1 in 5 borrowers do not understand the terms of their loans, which leads to misunderstandings, misconceptions, and eventually leads them to default on student loans.
Why the student debt crisis matters
The student debt crisis may seem like an isolated problem that only impacts millennials, but nothing could me more untrue. According to The Wall Street Journal, more than 40% of Americans who have borrowed money from federal student loan programs are either behind on payments or have stopped making payments, raising concerns that nearly $200 billion will go unpaid.
What does this mean for the American economy? As more young adults become slaves to student debt, they will no longer be able to grow their personal wealth by contributing to retirement funds, purchasing their first home, and following the model that has sustained our economy for decades. This personal debt problem has already begun to affect tax payers as a whole, and will continue to do so until we collectively make some changes.
How to avoid the student loan spiral
While most of us cannot personally impact the problems with student loans on a macro level, we all have the opportunity to make changes and choices that will help ourselves and our families.
Get informed: You can avoid getting caught in disadvantageous loans by taking the time to truly understand the borrowing terms. Carefully evaluate the lender, the attached interest rates, and read all the fine print. Many parents experience surprise when they discover lenders can come after them on loans they co-signed with their students. Students experience equal amounts of surprise when they realize loans can begin gathering interest before they even graduate. Getting all the facts on your loans up-front will contribute to your ability to stay ahead of the payments.
Get started with CollegeChoiceToday: There’s no reason to jump into the complicated world of paying for college completely alone. We are here to help! CollegeChoiceToday’s highly trained college financial advisors and placement experts can provide you with little-known strategies for saving thousands on college costs. We also advise our clients of common and costly mistakes to avoid. We have proven strategies for saving during college years, strategies for parents and grandparents, and strategies for leveraging your business to reduce college costs. Follow this link to get started now!