By Alan Prahl
About 70% of college students borrow money to go to school. The total college debt nationally is now nearly $1.3 trillion. More than 750,000 people in Wisconsin have federal student loan debt, thousands more have private student loans, and 9.9% of student loans in Wisconsin are in default.
The average college graduate finishes school owing more than $30,000 on student loans, and payments of $250 to $300 a month are common.
Often, more than one person in a household has student loan debt. According to Nerdwallet, the average household that has student loan debt owes $48,172. Imagine owing $50,000 or more on student loans, possibly having a car loan or some credit card debt, and then thinking about buying a house.
In a recent survey, 71% of people who do not own homes and have student loan debt said that debt is keeping them from buying a house. Student loan debt impacts lives in other ways also. Many people are delaying purchases like buying a car. Some are postponing getting married or having children.
Many people with student loan debt wonder if they are making the best choice or if there’s a better way to deal with their loans. In a national survey, 69% of young professionals said they were confused about student loan repayment options.
The options are confusing. Federal and private student loans have different rules. A few choices include graduated repayment plans, extended repayment plans and income based repayment plans. People with limited incomes may qualify for a student loan deferment or they may have a partial financial hardship that would qualify them for a pay-as-you-earn plan. Some people wonder if they should aggressively pay down debt. While that can be a good financial move, not everyone has the ability to do this.
While the choices can be confusing, the good news is that there are some options available. People who wonder about their student loan debt options can talk with FISC. We offer low-cost advice to help people understand their options with student loan and other debt.