The cost of obtaining a college education has been increasing steadily over the years. As of 2019, this cost has reached an all-time high. Nowadays, most college students require the help of scholarships and student loans to cover the costs. However, the average student loan debt has risen along with the price-tag of college.
Here’s a look at the average student debt in the U.S. in 2019.
Important Things to Keep In Mind
Aside from free gift aid like scholarships, taking out a federal student loan is the best option students have for borrowing money for college. Sometimes, even that is not enough to cover the full cost of education. In that case, students then turn to private lenders for additional student loans, although private student loans are very much more expensive.
All student loans, except for subsidized loans, start accruing interest from the day they are disbursed. This means the interest keeps adding up right through the life of the loan. By the time a student has finished paying off their dues, they would have paid back several times more than they borrowed. All of this makes for staggering statistics.
Student Loan Debt Statistics in 2019
According to the latest statistics, the total amount of U.S. student loan debt is estimated to be more than $1.53 trillion. This figure takes into consideration the money owed by fresh graduates as well as borrowers who graduated several years earlier.
In theory (ideally), those who graduated more than 10 years ago should have cleared all their debts by now. The standard repayment term for federal student loans is 10 years. However, the majority of borrowers find it impossible to stick with this repayment term. Most choose to lower the monthly payments, which extends the life of their loan. Statistics indicate that most graduates take a little over 19 years to finally clear all their student loan debt.
So what is the average student loan debt? An estimated 1 in 4 students in America have taken student loans. That’s an estimated 44.7 million students with a total student loan debt of $1.53 trillion. This puts the average student loan debt amount at about $37,172. Each borrower pays an average of $393 every month towards their loan payment. This is up from the estimated $227 that borrowers paid every month towards their loan in 2015.
Comparing Student Loan Debt With Other Debt
House mortgages have traditionally been the largest form of debt in America. This is followed by auto loan and credit card debt. This has been steadily changing over the past few years. Since 2004, student loan debt has surpassed both auto loan and credit card debt.
So What Can You Do To Lower Your Student Loan Debt?
It’s not all doom and gloom, though. By understanding your student loan, repayment options, and some financial strategies, student loan debt can be manageable. Here are a few things to consider.
Student Loan Consolidation
If you have multiple student loans, it can be beneficial to consolidate them into a solitary loan. This will help you with management, since you only have to worry about one due date and one repayment amount.
When you’re on top of your loans, it’s much easier to avoid costly mistakes and stick with your plan.
Student Loan Refinancing
Is your interest rate too high? Not a fan of your loan’s repayment plan? Want to lower monthly payments, or increase them so you can pay it off faster? If you want something about your loan to change, consider refinancing it.
Everyone has different needs, salaries, priorities, and living conditions. Therefore, there’s not a one-size-fits-all method for repaying loans. Refinancing can make the student loans fit better to your current livelihood.
Federal Student Loan Forgiveness
Depending on your career path, you may be eligible for federal student loan forgiveness. Those working in public service—such as nurses, teachers, firefighters, the military, government workers, or non-profit workers—can have parts of their federal loans forgiven after working a certain number of years in their field.
Exhaust All Other Forms of Financial Aid First
This might be the most important way to reduce student loan debt. Apply to as many scholarships as you qualify for. Join a work study. Seek grants. File the FAFSA. If you still require funds, pursue federal student loans first, as they tend to have lower interest rates and more flexible repayment plans.
With some forethought, a solid plan, and some financial discipline, debt can be manageable, and you can avoid being saddled with that average student loan debt—$37,172.