Student loan debt can be a devastating experience for many students. It is the type of debt most people dread. Student debt is typically a type of debt that’s owed by a college, once returned, or recent graduate to an accredited lending institution, to either a bank or to an educational institution. Loan repayments are typically scheduled for one quarter of the borrower’s wages at the end of each year. The repayment schedule can change slightly from school to school or from borrower to lender, but for the most part the loan will be repaid over the course of a fixed number of years.
The average student loan debt of graduates is staggering, but it is not just the recent graduates who have an overwhelming burden of college debt. The average college debt is actually nearly double that of the typical working adult. This level of student debt has resulted in thousands of college seniors defaulting on their student loans, a situation which could ultimately lead to the failure of the college or university. While the federal government and private lenders are willing to forgive a portion of the outstanding student loan debt of recent graduates, there is very little help available to recent graduates who carry significantly higher than average student loan debt.
The average student loan debt of graduates ranges between ten and thirty thousand dollars per student. Most student loans are not adjustable, meaning that the amounts do not vary according to current market rates. Thus, the majority of student loans will have fixed student loan repayments that cannot be affected by economic fluctuations. Some student loans however, will offer a choice of flexible repayment plans, and these repayment plans will often be based on economic factors.
One of the major concerns for graduates carrying a large amount of student loan debt is how they will be able to afford their educations. As America’s population ages, the need to find less expensive ways to gain experience and fulfill employment goals is becoming more important than ever. Currently, according to the College Board, only forty-two percent of employed individuals are working in jobs that require at least a bachelor’s degree. The number of employed people with advanced degrees has risen by approximately one percent annually. If the trend continues, the number of employed people with advanced degrees will continue to grow substantially over the next decade.
Along with issues related to higher education, the issue of student loan debt forgiveness also affects individuals who are currently in the process of starting out in new and future careers. Many individuals start out in lower paying jobs, and when they get to the point in their careers where they are earning more than previous positions, they find that they must begin to pay all of the student loan debt that they accumulated during their time in school. Gradually, most workers will no longer qualify for federal assistance programs. For this reason, newly arrived workers who wish to continue working in their current profession now must work much harder to convince prospective employers that they are worthy of a promotion to another position within the company.
For those individuals who have yet to start out in their careers, or would get out of the workforce entirely if they were not for student debt relief, there are other means to pay off their outstanding student debt. Many employers offer their employees the ability to defer their tuition for up to two years once they have been hired. This type of deferment would get individuals on track toward their degree, saving them from having to pay back the full amount of their student loan debt. It would also make it easier to be able to continue to work towards an advanced degree as well as earning the salary that you are currently earning.
There are also options for those who are in lower economic conditions but would still like to get their college debts paid off. One thing that many individuals do is apply for a consolidation plan for their student debt. Typically, these plans will require borrowers to put money down on a collateral interest rate with the company that will be lending the money to pay off their loans. After a specified amount of time has passed, the company will then begin to deduct the amount of money from their savings, and thus paying off their debt. This is a good option for individuals who may be experiencing the hardship of juggling multiple loans, however, it would be wise to complete detailed research before accepting such a plan.
For those individuals who are not currently working, but would like to, there are options to pay off college loans through a lender. This can be done by getting a federal loan, and using the interest paid on it to pay off any other higher interest loans. This is a viable choice for those who are not currently receiving any type of financial aid, but still wish to be able to go to college and graduate without accruing more educational debt. However, detailed research should be conducted to determine which lender would offer the best deal for such individuals.