Phoenix, Arizona (PRWEB) May 30, 2014
As the cost of higher education continues to rise, student loan debt has grown right alongside it – now nearing an average of $30,000 for students who take out loans to cover the cost of college. Such debt may hinder their ability to improve their credit or build a savings account, but the impacts of student debt are even more far-reaching.
“College graduates have much greater earning power and job security, but many are straddled with student debt they have trouble repaying,” said Michael Sullivan, chief education officer for Take Charge America, a national nonprofit credit and student loan counseling agency. “This may impede their efforts to create a nest egg or reach financial milestones, such as homeownership.”
A new study from Pew Research Center shows a major financial gap between young college-educated adults who are in debt and those who are not. In young households where the head of household is younger than 40, those with student debt have a median net worth of $8,700, while young households without debt have a median net worth of $64,700.
But, student debt doesn’t only affect young adults. The Federal Reserve Bank of New York reports that adults 60 and over owe some $43 billion in student loans, and more than 10 percent of those loans are delinquent. In some cases, funds are garnished from Social Security checks to pay down loans that are decades old.
“The student debt crisis is wreaking havoc on every generation,” added Sullivan. “Debt impedes young adults’ ability to get their financial footing and even harms seniors in retirement – but there are options for people who want a better financial future.”
To help borrowers pay off student loans and focus on their long-term financial wellbeing, Sullivan offers three tips:
1. Understand your repayment options: There are numerous repayment options for student loan debt. Borrowers should pick a plan that allows them to keep their loans in good standing while paying off balances as quickly as possible.
2. Focus your efforts: Debt repayment should be a top priority. Borrowers should consider budgeting every dollar, seeking a second job, and delaying other purchases to pay off student loans.
3. Get professional help: Resources are available for people who need help paying off student loans and improving their financial health. To learn more about student loan repayment options and to identify which resources are best for you, visit Take Charge America’s website or call (877) 784-2008.