College Loan Debt
College loan debt is the number one issue facing the 20 something generation. Rising tuition, housing, and food costs have all added to the required amount of college loan debt a person must incur in order to obtain an education. This site will give you some tips and things to avoid that I have learned through my journey through college and obtaining a significant amount of college loan debt.
The perception of college loan debt is becoming increasingly more socially unacceptable. Older generations are telling students to quit whining and to to what they did to pay their way through school without taking on a significant amount of college loan debt. What they fail to realize is the rising costs associated with going to school while the wages for entry level positions have gone down. Students can no longer afford to pay their way through school no matter how many hours they work. They must rely on college loan debt to get them through.
The effects of college loan debt on the 20 something generation is devastating to many. Some students can find themselves with 6 figure amounts of college loan debt. The problem with this is that the job they will obtain as a result of this college loan debt is professional but will not pay enough to pay off this college loan debt any time soon.
These seemingly insurmountable amount of college loan debt has other effects on the 20 something generation as well. Typical savings goals for previous generations are now the things dreams are made of for those who are forced to pay down their college loan debt first. Buying a home, driving a car, and saving for retirement are no longer options for this generation and many have returned home to their parents after graduating to try and pay down college loan debt - which is known as the boomerang effect.
What you find as a result is an entire generation that is not able to ’start their lives’ until they are in their thirties because of the sheer volume of college loan debt. People are waiting to get married, have children, buy homes, and buy cars because they are not able to afford these things due to college loan debt. People are now being supported by their parents up into their late twenties and early thirties. That is almost half of a human life expectancy. Couple that with likely having to take care of aging parents and you are looking at maybe 20 years of not living with you parents in your entire life. College loan debt is placing a new burden on every generation and the economy. If students did not have this amount of college loan debt they would be spending money on other things to support the economy.
College loans consolidation may be an option for you. College loans consolidation means that you take all of your various college loan debt and combine them into one loan. College loans consolidation will likely mean that you pay MORE but over a LONGER period of time thus reducing your monthly college loan debt payment allowing you to put money towards other savings goals.
If you are looking for college loans consolidation options make sure that what you end up with will allow you to write off the interest payed. Students can deduct up to $2500 per year (at the time of this article) of college loan debt interest paid. Make sure that this option holds true if you are looking into college loans consolidation.
College loans consolidation could be the only way for you to ’start your life’ while also addressing your college loan debt. Make sure that your college loans consolidation plan has your best interests in mind. Do not fall for any plan that will have the interest rate start off low and then go high a few years down the road. That is a used car salesmen trick and is what has gotten the U.S. into its mortgage crisis. Never count on earning more money down the road to pay off something that you cannot afford right now. College loan debt may be the only exception to this rule as hopefully you will one day make some money.
College loans consolidation can be a way to help you if you have had to take out several loans while you were a student. College loans consolidation takes all of your existing loans and combines them into one big loan that you pay off over time. Be careful that you don’t get hosed by your college loans consolidation plan. You may be paying your loan off but how much will it cost you over the life of the loan. Would it still be worth it, or would it be worth living with your parents for one more year to pay down more of the principal on your college loan debt?
Hopefully you won’t have to even look at college loans consolidation as an option. Maybe you can use some of the tips on this site to prevent yourself from getting in too deep. Regardless, you are still going to have college loan debt and you are going to have to pay it off. The price of tuition and everything else continues to skyrocket. The only thing that isn’t is the wages for you when you get out of college. This makes it incredibly hard to pay off college loan debt without having to look at options like college loans consolidation.