The Debt Pool: Avoiding Student Loan Debt
Students are drowning in debt.
How bad is it?
Student loan totals top $1 trillion.
20 million: number of students attending college each year (in U.S.)
1.3 million: students graduated with debt in 2012
1.1 million: students graduating with debt in 2008
0.9 million: in 2004
40 million: cumulative number of students currently in debt
That’s more than the entire population of Canada, Poland, North Korea, Australia and more than 200 other countries. And 4X greater than the population of Sweden.
7 million: of the 40 million have defaulted [Or, 2% of U.S. population]
2014: Average student loan debt, about $30,000
66%: of graduates from public colleges had student loans.
75%: of graduates from private nonprofit colleges had student loans.
88%: of graduates from for-profit colleges had student loans
Avoid Debt Altogether
1.Savings
Summer jobs
Birthday money, gifts
Parents paying for it
2.Earn Money while In College
Grants and scholarships
Work grants
Be freelance creative: write, take stock photos
Start a business, i.e. website developer
Tutor others
Crowd fund your education
Buy a sheriff sale house, renovate, flip
Go to night school, work during day
Upstart.com Sell some of your future earnings
If all else fails and you are already in debt…..
Tips for keeping debt under control
1. Keep track: Of balance and repayment status
2. Saving Grace Period: how long you can wait before first payment
3. Stay in Touch: Ignoring lender bills lead to default
4. Pick the Right Repayment Option
5. Don’t Panic: You can temporarily postpone your federal loan payments
6. Stay out of Trouble! Not paying can lead to delinquency
7. Prepay If You Can
8. Pay Off Most Expensive Loans First
9. To Consolidate or Not to Consolidate Your Loans: Consider your options
10. Deduct your student loan interest at tax time
11. Loan Forgiveness: Sometimes it is an option
Where political candidates stand on easing student loan debt
Democrats:
Hillary Clinton: Government intervention to ease debt burden
Martin O’Malley: college should be debt free
Bernie Sanders: Tuition free
Jim Webb: [no stated solution]
Republican:
Jeb Bush: Incentivize schools to drive down costs
Ben Carson: Require families to rely more on personal responsibility, instead of student loans to get through school
Chris Christie: Debt-free college is “wrong.” Calls for reforming the system to focus more on low-income borrowers.
Donald Trump: Stop government profiting from student loans
Ted Cruz: Against allowing students to refinance loans. Empathizes with students in debt.
Carly Fiorina: Increase competition to lower prices
Lindsey Graham: Allow students to refinance their loans. Increase competition. Offer loan forgiveness for teachers.
Mike Huckabee: Students can refi. Cut back on government involvement.
Bobby Jindal: Same as Huckabee
John Kasich: Increased government spending on higher ed as governor
George Pataki: “College is way too expensive”
Marco Rubio: advocates income based repayment
Rick Santorum: Roll back government role in Ed.
Sources:
https://ticas.org/content/posd/top-10-student-loan-tips-recent-graduates
https://blogs.wsj.com/numbers/congatulations-to-class-of-2014-the-most-indebted-ever-1368/
https://ticas.org/sites/default/files/pub_files/Debt_Facts_and_Sources.pdf
https://www.marketwatch.com/story/where-the-presidential-candidates-stand-on-student-debt-2015-07-28
https://www.schools.com/articles/how-to-avoid-student-loan-default
