It's 2016, and students are weighed down by student loans now more than ever.
American college students owe nearly $1.2 trillion in student loan debt—and that's spread out between around 44 million borrows. Sixty-eight percent of college graduates nationwide are exiting with a student loan with an average debt clocking in at $30,100, which is up four percent from last year's record.
"That means the majority of new college graduates are facing monthly student loan payments in excess of $300 a month over the next 10 years," Time Magazine writes.
Even scarier? Nineteen percent of those loans were private, which traditionally have higher interest rates and are harder for students to pay off and offer little flexibility. Federal loans offer a low interest rate.
"This year’s undergraduates will pay just 3.76 percent in interest and 1.07 percent in one-time fees, for a total annual percentage rate of about 4 percent. Federal student loans also offer flexible repayment options, such as income-based repayment, and the possibility of forgiveness of at least part of the debt," Time Magazine wrote.
“Compared to federal loans, private loans—whether from banks, states, or schools—can be much harder to repay, especially if the borrower hits hard times,” said Debbie Cochrane to Time, a co-author of TICAS’s loan report.
Didn't think student loans were that big of an issue? Think again. Over seven million of the US population have defaulted on their student loan payments, according to Lend EDU.
- Over 30 percent of loan borrowers move back in with their parents after graduation.
- Over 40 percent of borrowers have delayed starting a family.
- Over 60 percent of borrowers have delayed buying a car.
- Over 70 percent of borrowers have delayed saving for retirement.
- Almost 30 percent of borrowers have delayed getting married.
To read more about the student debt crisis, click here!
