Student Debt

Student Loan Debt Statistics In 2018: A $1.5 Trillion Crisis

shutterstock

shutterstock

Published in...

forbes.png

Student loan debt is now the second highest consumer debt category - behind only mortgage debt - and higher than both credit cards and auto loans.

According to Make Lemonade, there are more than 44 million borrowers who collectively owe $1.5 trillion in student loan debt in the U.S. alone. The average student in the Class of 2016 has $37,172 in student loan debt.

The latest student loan debt statistics for 2018 show how serious the student loan debt crisis has become - for borrowers across all demographics and age groups.

If you are a student loan borrower, the following student loan debt statistics can help you make more informed decisions regarding student loan refinance, student loan consolidation, student loan repayment and student loan forgiveness.

Student Loan Statistics: Overview

Total Student Loan Debt: $1.52 trillion

Total U.S. Borrowers With Student Loan Debt: 44.2 million

Student Loan Delinquency Or Default Rate: 10.7% (90+ days delinquent)

Total Increase In Student Loan Debt In Most Recent Quarter:$29 billion

New Delinquent Balances (30+ days): $32.6 billion

New Delinquent Balances - Seriously Delinquent (90+ days):$31 billion

(Source: As of 1Q 2018, Federal Reserve & New York Federal Reserve)

Read More...

Student loan debt: What kids and their parents need to know

Butch Dill / AP file

Butch Dill / AP file

Published in

image.jpeg

It's an exciting time of year for high school seniors, who, in addition to getting everything secured to graduate, are also cementing plans about what they're going to do come fall. Continuing on to college is a likely option and one that has been wildly growing in popularity over the past few years. Watching young family members head off to tour college campuses brings me back to more than a dozen years ago when I was in similar shoes. I was so enamored with the idea of my college experience that I wasn’t thinking about any of the financial details. Frankly, it didn’t seem like something I had to worry about at the time, so why kill my educational buzz? Additionally, I was confused and overwhelmed by the paperwork as was my mother, who was struggling with her own finances at the time.

Though the student debt crisis has considerably worsened since then (now topping 1.48 trillion and likely to increase as universities get even pricier), it looks like misconceptions still abound. A new survey by Student Loan Hero (SLH) found that 52 percent of borrowers think interest doesn’t accrue while they’re in school, 53 percent think student loan payments are automatically based on their income and roughly 70 percent are misinformed about student loan forgiveness. It all begs these questions: How do student loans work and how can parents and students make the best choices when venturing down that prickly path?

FIRST, REACH OUT TO YOUR SCHOOL COUNSELORS AND USE A STUDENT LOAN CALCULATOR

“I would recommend that high school students and their families speak to their school counselors for guidance on the financial aid and student loan borrowing process,” says Rebecca Safier, financial expert at SLH. “Your college financial aid process can also offer help and information.”

“Our dashboard and calculators are also really useful tools for tracking your balances and monthly payments and coming up with a strategy for repayment,” she adds. Note: repayment is designed to span 10 years, or 120 payments, and includes interest.

FILL OUT THOSE FEDERAL GRANT FORMS — YOU MAY GET SOME FREE MONEY

The first thing any prospective college student needs to do is to find out if they qualify for any federal grants by filling out a FAFSA form. You’ll also need to fill this out to qualify for a federal loan (which we break down below).

As Brianna McGurran, student loan expert at NerdWallet explains, federal grants are based on financial need, so if you and/or your family is in a low income bracket, where you can provide little or no payments for college, you can qualify for a Federal Pell Grant, “which is worth about $6,000 a year,” says McGurran. (Read More...)

Student loans 101: Being a smart borrower could save you big money

college-student-with-parents.jpg

Published in

site-masthead-logo-dark@2x.png

When Sergio Torres started college at AIB four years ago, he felt overwhelmed by the financial aid process. He’s a first-generation college student whose parents emigrated from Mexico.

“My parents weren’t able to help me much with finances, budgeting, loans and scholarships, so that was something I had to figure out on my own,” he said. “I met with a financial aid adviser every term, but at first I didn’t really understand what they were telling me.”

Freshman year, Torres received some academic scholarships and need-based grants, and he accepted all of the loans that were offered to him — about $8,000 worth. His sophomore year he moved home to Newell and took classes at nearby Iowa Central Community College, taking out another $2,000 in loans.

Torres headed to Ames to start his junior year at Iowa State, taking out $5,000 in loans, and bringing his total to $15,000.

“At first I didn’t really think through the impact that loans would have on my future, and I thought it was OK to take all of the loans I was offered,” he said. “Now I understand that it’s best to graduate with the smallest amount of loans possible."

Torres worked more during the school year to avoid taking more loans and pay off existing ones. He became more involved in campus activities and applied for all of the scholarships he could.

Torres’ commitment paid off. With his 3.9 GPA, range of activities and status as a first-generation college student, he qualified for enough academic scholarships and need-based grants to cover his full tuition, room and board for his senior year so he didn’t need more loans.

He has one semester left and will graduate in December. He hopes to avoid taking out additional loans and plans to earn enough money to pay his loan debt down to about $12,000 by graduation day.

“I used to think the financial aid process was intimidating,” Torres said, “But now that I understand it better it’s really not that scary.” (Read More...)