Earlier this month, I wrote about ways to reduce college costs and avoid a lifetime of debt. But what if you’re already in the trenches with a mountain of student loan debt? Now what?
According to the U.S. Federal Reserve, student loan debt reached an unprecedented $1.56 trillion in 2019, impacting roughly 44 million Americans. Let’s put that in perspective. Student loan debt is now significantly higher than the $960 billion federal budget deficit (as of August 21, 2019), and more than half a billion more than total U.S. credit card debt at $1.03 trillion.
What does this mean on an individual basis? The average monthly student loan payment (among those not in deferment) is $393. For someone just out of college, that can represent a significant percentage of take-home pay, making it difficult to balance other expenses, such as food, rent, transportation and healthcare costs. It’s also contributing factor for why 11.5% of student loans are 90 days or more delinquent or in default. The negative effects of carrying substantial debt can easily bleed into other parts of your life, impacting your credit score, ability to purchase a home, career choices, relationships, social life and more.