The average college debt has increased by over $60 billion dollars since 2007. This amount has risen because students have to borrow more money, or they have been less fortunate financially and have defaulted on their loans. Today’s average college debt has become much worse than it was in the past. But the good news is that it is slowly being balanced out.
The average college debt increased by 62.7 percent from 2006 to last year. However, there is good news: the increase of college loan debt is leveling off. While the average college debt continues to increase slightly, it is level off from previous years. This means that while colleges are struggling to cover tuition costs, students graduating from high school or going off to college and getting a bachelor’s degree are paying more in student loans. In fact, students graduating from colleges have a debt load that is now higher than the average amount for homeowners!
The reasons for this are varied, but some analysts blame the lax lending standards that have been put in place as the reason for the average college debt levels being so high. It also helps that there are now more students graduating from Ivy League schools than in any other school. The sheer number of highly educated graduates makes it difficult for colleges to provide financial aid packages to their students. There simply is not enough money to go around! And those students with the ability to pay end up paying much more than their less able peers.
Another factor that has played into the rising average college debt is the amount of borrowing that students have done in recent years to finance their educations. Student loan debts have soared to record levels, and there are more graduates than ever entering the workforce with huge amounts of student loans to pay back. At the same time, federal student loans have been made even more complicated by the current economic landscape. The sudden burst of stimulus money has helped ease the financial burden on graduates, but a lot of it was quickly recouped when graduates began to return to school to earn their graduate degrees.
One place that students graduating from top colleges are concerned with is the average debt they are accruing for their educations. The average college debt for graduates of just about every major university has steadily increased in recent years, to the point that many graduates cannot repay their student loans. Some universities have even gone so far as to increase their average debt owed on campus by at least fifty percent! At the very least, the average debt for graduates of business schools has also increased over the past two years. If you graduated just a few years ago, your debt may be much higher than it was just a few short years ago.
One way to keep your average student loan debt low is to start saving while you are still in school. The best years of one’s life are usually those prior to graduating from college, so begin saving now. You can also start a savings program that you can maintain throughout your studies and make small interest-free payments on a monthly basis until graduation.
When considering your average college student debt, you also want to consider your future. The longer you go without making any student loan payments, the higher your debt will grow. It is very easy to put off payments for a few months, or even a couple of years; however, the longer you do it, the larger your payments will become, and the more you will accrue interest. If you have any dreams of a successful career in a field where your skills can easily sell your services (like medical or law), you will need to think very carefully about how much debt you will need to incur in order to make a living.
There are solutions available to those average students who find themselves in a heavy amount of college loan debt. One solution is a federal student loan consolidation plan. This program offers students in debt a chance to consolidate all of their college debt into one loan with a single interest rate. This allows students to save money each month by only having to make one payment, instead of multiple payments to many different companies. Another option for those average college student debts is to work with a financial aid office at your college to explore other options. You may find a scholarship that can help you pay for school as well as reduce the amount of interest you pay.