Class of 2014: Most Likely to Be In Serious Student Loan Debt

There’s a new set of numbers out on student loan debt, and the results are shocking. The Institute for College Access and Success’s project on student debt notes that 70 percent of seniors graduating from public and nonprofit colleges are indebted to the tune of $28,950 average per borrower. This does not count the students who graduated from for-profit colleges that year, and some data is missing from certain states, leaving the picture incomplete. Still, the numbers are fascinating to consider.

• Graduates of private, nonprofit colleges in Alaska had an average debt of $8,922, making it the lowest average debt in the report.
• The highest average debt is borne by Connecticut graduates of private, nonprofit colleges, with each holding $36,242 in student loans.
• Louisiana students had the lowest percentage of indebted public 4-year college graduates at 44 percent.
• A whopping 81 percent of those graduating from private, nonprofit 4-year colleges in North Dakota or public 4-year colleges in New Hampshire left with student debts.

The ten year progression to this level of debt is shocking – that’s a word you’re going to hear often – since the average student in 2004 left college with 56 percent less debt than today’s new grads. And even now, those grads are still paying off their own loans. Getting your loans out of the way is vital to your future, and you should honestly devote a good chunk of your income to paying them down as fast as you can. Yes, living with your parents can be a good thing! Use some of these tips to get a grip:

1. Pay more than the minimum. Paying extra counts toward the principal, and that lowers the amount that you owe in interest. In addition to paying off faster, you can save literally tens of thousands in interest charges.
2. Get financial counseling and tame your other debt, too. Credit cards prey on the naiveté of college students who do not have much experience with credit cards and financial instruments. You do not need five figures of credit card debt to match your student loans!
3. Consolidate and refinance your loans into one loan with one payment, often at a better interest rate than you were seeing before.
4. Take a job with loan forgiveness such as a health sector job or a teaching job.
5. Don’t forget your deductions! You can deduct up to $2,500 a year for interest on your student loans, and roll that tax refund into your repayment strategy.
6. Watch out for refinancing that lowers your payment by extending the term of your loan. You don’t really want to be paying these loans off when your own child’s going off to college.

Finally, if you’re having trouble with your loan servicer, fighting off collection attempts on loans you’ve already paid, or being scammed, you need something more than DIY measures. Come and consult with us at Van Horn Law Group, and let us help to protect your interests and your future.