Average College Debt Is ,000 – Student Education Loan

Research conducted by student loan company Sallie Mae shows that in 2010, about 5 percent of college students paid an average of more than $ 2,000 in tuition and other educational expenses using a credit card to avoid taking out student loans. The same study showed that 6 percent of parents used credit cards to pay an average of nearly $ 5,000 in educational expenses for their college children. Is using credit cards a smart way to avoid college loan debt? Financial advisors are in near-universal agreement that the answer is no, but that isn’t stopping thousands of families from using credit cards in place of parent and student loans. Some families might think that all debt is equal; others might think that they won’t qualify for college loans. So what advantages exactly do education loans offer over credit cards?

Can I Get A Job To Pay My Student Education Loan? What concerns most of us is jobs — jobs that enable a college graduate to enter the workplace at an income level where he or she can make ends meet and manage student loan repayment without parental financial support or more government subsidies. According to the report by The Project On Student Debt, for graduating students the average college debt is $ 24,000. After adding in the interest, the payback can escalate to over $ 31,000. These days it’s tough to find a job to cover basic overhead, and most young people don’t factor in the cost of their student education loans until reality sets in. College tuition and fees have risen four times that of the median income since 1982. Graduates are not getting jobs and cannot pay off their college debt.

Fixed Interest Rates While most credit cards carry variable interest rates, federal student and parent loans are fixed-rate loans. With a fixed interest rate, you have the security of knowing that your student loan rate and monthly payments won’t go up even when general interest rates do. Many credit cards will also penalize you for late or missed payments by raising your interest rate. Federal school loans keep the same rate regardless of your payment history.

A senior college faculty member made the point that course expectations have declined for decades, leaving many college graduates unprepared for their future careers. Such emphasis is placed on college education in favor of the trades that inflated high school and college grades reward mediocre scholastic achievement. Many young people who would have been more productive in a skilled trade that fulfills them are funneled through the higher academic system, but even top-tier doctors or lawyers may not be able to keep up the student loan repayment on their tab of $ 100,000 or more.

Income-Based Repayment Options Once you do begin repaying your college loans, federal loans offer extended and income-based repayment options. Extended repayment plans give you more time to repay, reducing the amount you have to pay each month. An income-based repayment plan scales down your monthly payments to a certain allowable percentage of your income so that your student loan payments aren’t eating up more of your budget than you can live on. Credit cards don’t offer this kind of repayment flexibility, regardless of your employment, income, or financial situation. Your credit card will require a minimum monthly payment, and if you don’t have the resources to pay it, your credit card company can begin collection activities to try to recover the money you owe them.

Now that I am in graduate school I have taken on student loans for the first time and I can sympathize with other students in this economy. I take my debts seriously but I also look for ways to pay them off as fast as I can and keep my credit rating good. It’s all about being responsible with your money, creating a budget and if possible stop using your credit cards (save them for emergencies – or at least until you can pay them in full every month).

Student Loan Forgiveness Programs Whereas the only way to escape your current credit card debt is to have it written off in a bankruptcy, several loan forgiveness programs exist that provide partial or total student loan debt relief for eligible borrowers. Typically, these loan forgiveness programs will pay off some or all of your undergraduate and graduate school loan debt in exchange for a commitment from you to work for a certain number of years in a high-demand or underserved area. The federal government sponsors the Public Loan Forgiveness Program, which will write off any remaining federal education loan debt you have after you’ve worked for 10 years in a public-service job.

Returning students have been able to complete college educations through online degree programs. Younger students can reduce their housing and commuting expenses by taking classes at home on their computers, to avoid starting their career with a student education loan.