As you no doubt are aware, student loans have become an increasing burden on America’s college students and graduates. Consider these statistics: according to the Federal Reserve and the Wall Street Journal, there is $1.45 trillion in total student loan debt, second only to US mortgage debt. Also, 44.2 million Americans have student loan debt—that’s 60% of college graduates.
As the years have gone by, the job market has become increasingly competitive. Many people have taken loans out to attend college, and have unfortunately found an extremely competitive job market, with fewer jobs and lower wages. Having been met with poor job prospects, many have opted to continue on to grad school, taking out yet more loans.
If you’re a recent college graduate, how should you approach the task of paying off your loans? First, make sure you have protection vehicles in place such as life and disability insurance--in case you cannot make these payments, your new family or parents aren’t burdened with them. Second, avoid temptations from private bankers offering easy credit for cars and large houses; if available, use low interest loans to consolidate these debts. Pay down higher interest loans first. As your income grows, you can set up an amortization schedule to maximize payments and eliminate this debt as quickly as possible.
We have planning tools available that can help analyze loans, and strategies for paying down college loans. I’ve seen student loan debt linger well into clients’ forties. It doesn’t go away, so if you’d like to work on a strategy for eliminating it, feel free to contact me.
Monte Miller (865) firstname.lastname@example.org