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The Average Student Loan Debt & How To Get Out of It

November 18, 2011

Average Student Loan Debt

Average Student Loan Debt

As of 2011, the average student loan debt that seniors are looking at paying after they graduate is at an average of $25,250 which is higher than it has ever been, with debt averages that range anywhere from as low as $900 to higher than $55,000. New Hampshire holds the title of the state with the highest average debt, currently sitting a staggering $31,050 and the lowest debt average is in the state of Utah which has a median of $15,500 The average debt students incur is getting higher, due to many reasons, some which include sky rocketing tuition costs with some schools charging upwards of $40,000 per year, switching majors forcing more years in school among others. This debt is said to be from about 80 percent coming from federal loans and around 20 percent coming from private loans.

This average student loan debt for students can be dropped a little by applying for federal grant programs like the Pell Grant or the Supplemental Educational Opportunity Grant (FSEOG) among many others, through filling out a Free Application for Federal Student Aid (FAFSA) each year, but regardless, debt can accumulate fast throughout the 4 or more years of schooling. Considering this, you will need a game plan on how to knock out your debt as soon as you get out of college, which we have below for you are multiple different methods that you can utilize to knock your debt out fast.

  •  Save For Retirement – This may sound odd and absurd, but saving for retirement will provide you with tax deductions, which you can use the money in deductions toward your student loans. You can either enjoy watching your retirement funds stack up, or later on use them to get out of the average student loan debt pit. To start, you can enroll in a Registered Retirement Savings Plan (RRSP).
  • Student Loan Forgiveness – There are many great student loan forgiveness options that you can use. The two main types are working a public service job, which usually takes a commitment of working 10 years as well as 10 years of on time payment, which at the end of your repayment term the rest of your debt is wiped away, which is a great option for those with very high debt totals. The other most popular option is providing community service for organizations like Peace Corps and Americorps as well as VISTA, who will either pay a percentage of your loans off for each year of service or provide you with a lump sum each year of service which you can use towards getting out of the average student loan debt hole.
  • Pay Higher Than The Minimum – The minimum payment is set to keep you in debt for the longest time possible. If there are no repayment penalties, then do whatever you have to do to pay a higher payment than the monthly minimum as this will both save you money in interest you would have paid as well as get you out of debt faster.
  • Keep Living Like A Student – Be as frugal as possible, but in moderation. Live like you did in college but don’t forget to splurge a little.
  • Budget & Calculators – Another way get out of student loan debt is to budget exactly what you are spending and take out things that you don’t really need. You can also use repayment calculators to check how much you will save if you up the monthly payments with the funds you saved from cutting out the non essentials.
  • Employer Negotiation – Two options for this average student loan debt payoff category, one being you can try to negotiate a higher job salary, even a couple thousand dollars more a year than what they would originally offer, which you can drop on your loan debt. Two, you can try talking to your employer about them paying off some of your loan debt by agreeing to stay with them for a certain amount of time, or hitting certain numbers, etc.
  • Income Based Repayment – If you happen to be struggling with paying off your debt, it isn’t a get out of debt quick method, but can help you get of the student loan debt average. The Income Based Repayment (IBR) repayment option on federal student loans allow you to pay what is usually 15 percent of your monthly income to your debt, and can be as low as 5 dollars per month. There is also no repayment penalties on this repayment option, meaning that if you can afford to pay more later, you can do so without being hit with fees.

If you happen to still be in college while reading this average student loan debt article, it could be a great idea to get a job either part time or full time to help cover your expenses, which may be stressful, but you can consider taking a lighter load, which may result in a little more time in college, but a lot less to pay when you get out. You can also consider a work study job which are on campus jobs that help lower your cost of tuition. You can find out more by visiting your campuses main office. You can also consider putting a little bit of money towards your student loan debt while your are in school, like $100 per month or more if possible.