National Student Debt

 


THE PROBLEM AT A GLANCE

THE PROBLEM AT A GLANCE


Debt that goes beyond your finances

Major Life Events

Graduates with student debt are more likely to delay or put off getting married, purchasing a house or having kids compared to graduates without student debt. Major life events come at a cost that graduates with debt cannot afford to support. Not only is this detrimental for you as an individual but it adversely affects the national economy.

Employment Choices

Ironically enough, graduates with student debt are more likely than their peers without debt to choose jobs that are not in the field that they have their degree in (the source of their debt). They are also more likely to work multiple jobs to compensate for the dent in their income and move to different locations in search of higher paying jobs.

Retirement & Savings

Graduates with student debt are less likely to establish savings and retirement accounts when compared to their peers who do not have student debt. The inability to establish savings or retirement accounts often snowballs to cause other forms of debt and increase the age at which individuals are able to retire.

Lifestyle Choices

Having less expendable income on a weekly, monthly and yearly basis inhibits making healthy lifestyle choices that are available. Fitness/gym memberships, healthy grocery shopping, and higher caliber healthcare all come at a premium that debt-bearing graduates cannot or choose not to pay.

Where the problem lies




Government Regulations

The government has done virtually nothing to slow down the growing debt and its widespread effects. In fact, the most recent version of the tax bill did more to hurt student loan borrowers than it did to help them. The government has turned their back on the population responsible for its future.




Financial Complexity

Although options are limited there is a lot to consider when deciding on strategies to pay off your loan. Payment frequency, loan prioritization, payment plans, and consolidation are just a few of the aspects everyone needs to consider when managing their student loans. There is very little educational information out there for borrowers and even worse, student loan providers do not provide tools to visualize or maximize your payment plans.




Impractical Interest Rates

Interest is one of the single biggest factors when it comes to the lifetime of your loans. In some cases, you can end up making payments for decades and ultimately pay more in interest over that time than you did for your education. Unfortunately, the government or student loan providers have not done anything to minimize the interest you pay. Interest has allowed education to become a multi-trillion dollar business instead of a path to achieving the American dream.




Limited Options

The options that currently exist for individuals are extremely limited. A very small percentage of the population is eligible for student loan forgiveness and even if you are lucky enough to qualify for this, you still have to make payments for 10 years. The most impactful option current borrowers have is loan consolidation. Consolidating your loan can lower your monthly payments and ultimately reduce the time it takes to pay off your loan. Unfortunately, a good credit score is necessary to consolidate your loans and you still have to pay the full amount of your loan plus interest.