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At this moment, more than 45 million borrowers owe nearly $1.6 trillion in student loan debt, and student loans are the second biggest type of debt in America.
The average monthly payment on a student loan is just shy of $400. Think about that. Four hundred dollars a month is a pretty big deal to a recent graduate, who might not be making much money. In fact, as of around this time last year, the average starting salary for a recent graduate was roughly $51,000. After taxes, that’s a take-home of $38,000 a year, give or take. And just a bit over $3,000 a month. Now your recent grad is expected to hand $400 of that over in student loan debt? That’s about 13 percent of their take-home salary.
Of course, student loan debt doesn’t only plague young adults. The average payoff period of student loans ranging from $20,000 to $40,000 is about 20 years so a college graduate could be in her forties by the time that loan is paid off. That loan will be on her shoulders through her wedding day, and possibly through her first couple of kids. It could even be the reason she barely qualifies for a mortgage.
If these numbers and concepts are scary, well, that’s not quite the intention, but it is important to understand that student loan debt is no small deal. And if there is any way to eliminate or minimize it for your children, do it. We spoke with two experts – Rianka R. Dorsainvil, co-CEO of 2050 Wealth Partners, and Sonia Lewis aka The Student Loan Doctor – about how you can help your kids graduate college with no (or little) debt.
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Considering online college
“We’ve had a lot of clients really thinking about the worth of a traditional degree, given the virtual transformation of learning,” says Dorsainvil. Though the survey was small and may not have been very far-reaching, one quick poll found that only 57 percent of parents of college students planned to have their child return to the same institution this fall.
