It’s becoming more and more common for young adults graduating from college or other higher education programs to end their educational career with high amounts of debt. But how much is too much when it comes to student loan debt? At what point is the debt load that students are taking on too much to shoulder?
Recent reports indicate that the total outstanding student loan debt in the U.S. exceeds $1 trillion. That is a LOT of student debt. 2016 statistics show that graduates from this year owe a record-breaking $37,000 in student loans (average) when they leave school For many graduates who are just starting out, their ability to pay back what they owe is limited or even prevented by their earning potential. The job market for recent graduates isn’t perfect, and not all graduates are able to find employment right away. Additionally, many young adults leaving school are ready to get married and start families – which further limits their ability to pay back high amounts of debt.
Looking back at my own experience with student loans, I have regrets. When I left college, I was only able to find a part-time position working at a residential youth center making a low wage and working fewer than 30 hours per week. After a year, I decided to move back in with my parents to save money so I could start paying back my student loans (I had deferred them while I was only working part-time).
I paid on my loans for about a year and a half, but during that time I got married and was soon expecting my first child. After the birth of my son, I went back to work part-time because of the cost of child-care, and couldn’t afford my loan payments again. This cycle continued for a number of years while we had another baby, adopted two more children, and experienced several moves and job changes/losses. Each time I asked, my loan company was happy to grant me a deferment on my account, but the interest continued to accrue. By the time I had been out of college for 12 years, the amount I owed on my student loans had increased by nearly $10,000 due to interest.
I am paying off my student loan debt now, and have been for more than 8 years, but they are in an extended payment plan to keep the payments manageable. I currently parent 3 teens and a pre-teen. For those of you with older children, you know how hard teens are on a budget! Unless I win the lottery, I will be paying on my student loans until long after my own children have graduated from college. That’s a sobering thought.
Nobody seems to know exactly what the answers are to the rising student debt loads Americans are facing. It’s clear that education costs are rising and will likely continue to rise. It seems inevitable that students will need to continue to shoulder some of the cost of their education as parents are increasingly unable to foot such a large bill – I know I won’t be able to pay full education costs for my kids!
Education about student debt seems to be more important than ever. Learning about the options available, consequences of default and pitfalls to avoid is a key component of successfully navigating the process. It’s encouraging that lawmakers and industry leaders are looking for solutions and that conversations are happening about ways to help.
We’d like to know your thoughts — what are the solutions to handle the high levels of student loan debt young adults are taking on? What about the rising cost of college education? How does a family manage to raise kids and still pay student debt? What budget ideas have allowed you to pay down your debt quickly? Share your thoughts with us in the comments!
This article was syndicated and originally appeared on the CESI Debt Solutions website.
