Since the 1960s, student loan debt has been a controversial topic. The debates are not likely to end any time soon. The White House student loan forgiveness program has been blocked by two federal court and oral arguments are expected to be heard in the Supreme Court at the end of the month. The uncertainty can cause frustration and stress for those who have student loans.
If you or someone close to you has outstanding student loans, you may want to consider a solution that will help you deal with the uncertainty.
- For tens and millions of students, American and foreign alike, obtaining a degree from an American college or university remains a major goal. Over 4,000 colleges, universities and schools are located in the United States. Nearly 20 million students attend these institutions.
- According to the Association of Public & Land-Grant Universities, bachelor’s-degree holders earn $36,000 on average. This is 84 percent more than those with a high-school diploma. “
- For the 2022-2023 academic year, tuition costs averaged nearly $40,000. This is a higher cost than for students who attend public colleges but are from out of state. Public in-state school students paid an average of $10,500. These costs have increased exponentially since 1965 when the Higher Education Act expanded access to federal grants based on income. Over the past 20 years, tuition costs have increased by more than 6% per year on average. This is over 170% higher than inflation.
- Around 44 million people are currently in debt for $1.76 trillion.
- About 30% of undergraduates graduate debt-free and 25% have less than $20,000 in student loans. Only 6% of students have debts exceeding $100,000. They are responsible for about a third of the total student debt. Undergraduates are limited to borrowing federal funds of $31,000 for dependent students and $57,500 if they’re no longer relying on their parents. Most of those who owe over that amount have borrowed to pay for graduate school. “
If you have student loan debt, the best action to take will depend on your individual situation. However, if this is the case, then consider:
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- Currently, only federal student loans or public student loans can be deferred.
- You may have private student loans.
Consolidation may save you money on interest rates.
Set a plan for paying more than the minimum amount to speed up the repayment of your loan and save yourself money in the long term.
- Your application will be kept until a court ruling is made if you have already applied for forgiveness of federal student loans. At that time, there’s no reason to submit a fresh application.
- It is unlikely that it will make sense to pay off federal loans while they are still deferred, as there is no interest or payment. These loans will be deferred until the end July, unless there is new guidance before then.
- Federal loan holders who are still working towards their future goals can continue to build up a cash reserve and earn interest by saving and building a money market or high yield online account.
We can help you to plan and build a solid financial foundation for the future.
