In the United States, a college education is expensive. As a high school student, or graduate, you will likely be thinking about your career prospects in the workplace. The statistics indicate that the chances of finding stable employment and a good standard of living increase dramatically with a college education. Whether you’re thinking of undergraduate studies (Associates degree or Bachelor’s degree), or postgraduate studies (Masters degrees, or PhD’s etc.), you best be getting your ducks in a row because a college education is going to cost you. A privileged few are able to pay for their college education from funds allocated to them by their parents, while most people will be required to take out student loans. The problem with student loans is that they are an oppressive burden that will follow you for many years after you graduate. Fortunately, there are many options available to students in the form of Federal student aid. Otherwise known as the Free Application for Federal Student Aid (FAFSA), this initiative allows students to determine their eligibility for Federal government assistance for study purposes.
The FAFSA forms can be completed online by prospective students and once approved, the recipient qualifies for free tuition funds. These loans can even be used to boost your credit score, or establish your credit. It should be remembered that Federal aid is available to people across the board – high income earners, and low income earners alike. The benefits of these loans are that you don’t have to make any payments until after graduation. Graduates who find it difficult to repay the federal loan may be able to renegotiate the payment structure, or postpone it. Repayment on federal student aid loans is typically based on your income. A percentage of each paycheck will go towards repaying federal student aid. Unlike other types of loans, you will not be penalized if you prepay. Another fact to remember with federal student aid loans is that if you hold a qualifying public-service occupation, you will enjoy certain benefits.
How much of a burden is student debt in the US?
As of May 2017, it is estimated that student loan debt is now more than $1.4 trillion in the United States. Some 44 million people own that debt. This is a startling statistic, and one that every prospective student or graduate should consider. The figure is even more alarming when you note that US credit card debt is approximately $620 billion less than US student loan debt. The data suggests that 2016 graduates owe on average $37,172. That represents an increase of 6% from 2015. There is an 11.2% delinquency rate with student loan repayments. On average, the monthly repayment on student loans is $351 for people in the 20 – 30-year old age group. The median payment for borrowers in the 20 – 30-year old age group is $203.
The largest portion of student loan debt is found in direct loans which account for 31.5 million borrowers at a total of $949.1 billion. FFEL loans account for $335.2 billion of debt with 16.4 million borrowers. Perkins loans are much smaller, at $7.9 billion with some 2.7 million borrowers. The average debt for graduate students completing MBAs was $42,000, those with a Master of Education $50,879, those with a Master of Science at $50,400 and those with a Master of Arts at $58,539. Graduates with law degrees have an average debt of $140,616, while those in health sciences and medicine are indebted to the tune of $161,772. All of these numbers are mind-boggling, and they indicate how important it is to plan ahead with tertiary education to ensure that the right loans are applied for, and that the best possible payment options are implemented.
