How come the average student loan debt is believed to be about $19,000?

Being in debt is depressing. Recently I discuessed this matter at a forum, and I think it might be useful for my readers, so here is a quick otline of the discussion.

How come the average student loan debt is believed to be about $19,000?
I got to know that the average debt of a college graduate is about $19,000.
How come? _MY_ student loans - and that's from this year alone! - is about $18,000 (yep, eighteen grands), and that's excluding expenses like books and whatever.

Indeed this makes me pretty sad:
- I slaved over about 40 scholarships (ending up with mere $1500 in total in my pocket).
- and I graduated at the TOP (right, top!) of my class
- I worked hard in high school
- I filled out the FAFSA truthfully

How you guys/gals deal with it?

Some comments/advices/thoughts on the subject:

1)

Mine is nearly $50,000! It's not easy. I make monthy payments to the loan company. They work with you on the amount you can afford.

I try not to think about it, because I can't default. And filing bankruptsy doesn't touch it. I just try to carry on knowing that an educated nation is better than an uneducated nation.

My opinion is that college should be free to everyone as long as they keep up their grades and give something back to the nation.

2)

I took out maiximum loans and grants and graduated with $22,000 in debt. But I went to a "cheap" state school.
My brother went to a private school (DePaul) and graduated with $34,000 in debt.
Personally, I think paying a huge amount for a college degree from a school with so-called name recognition is kind of wasting your money.

But on the other hand, you might be able to get a higher paying job out of it so in a sense it all balances off. Hang in there, and just stay away from credit caards!!!

3)

I'm with you on this one. I am in the same boat, with maybe double of that, and I'm not quite done yet. I think it's more just an average, including people who get associates, which is only 2 years of schooling, vs 4 years for a bachelor's. I try not to think about my debt, but it's good to know alot of loans for education have low interest rates, and you have about 10 years or more to pay it off.

4)

the average is low because people save money to go to college and family help is usually a big part of it. It takes money to go to college unless you are super smart and you are willing to go to a school beneath your goal.

5)

I moved back in with my parents after college to pay off my loans :(

Try to find a job that will contribute to your education - mine pays 50% as long as I get a B.

6)

I graduated with a debt of 22,000 and this was for my undergrad AND my graduate degree. It took me about 11 years to pay off.

I worked my rear off, working two jobs and going for YEARS without ever having a day off. From work to school to work to school...

Borrowing via private student loans has become something of a "norm" recently that scares the crap out of me and I think it should be federally regulated. Most kids don't realize what this kind of debt will have on the rest of thier lives and negate the whole reason they went to college in the first place.

With the dropout rate being like it is for undergrads I personally don't think any freshman should be allowed to borrow... but who am i? Federal loans have limits on them for a reason. To protect you!! The sharks of private lenders have no such regulations... they'll loan you 40K a year.. A YEAR!

YOU just need to make sure you can live with your decision to borrow this much. THIS will be your life if you continue down this path.
18K times four years = 76K total equals payments of around 800 dollars a month for the next 10 to 30 years. That is a house payment where I live and borrowing this much is NOT NORMAL!

If you (or your cosigners) are even the TEENY bit squeemish about having this much debt you need to get out of that school now, before you get all the way to your junior or senior year and it's too late to tranfer and the bank says you or your cosigners debt to income ratio is too high and they cut you off!!!! Kinda stinks uh?

Go to a state school, don't do any loans except federal ones and work 30 hours a week.

Origin:Reconsolidation Loans: Facts and Hints

Reconsolidating Student Loan Benefits

OLR Research report has quite nicely summarized benefits (as well as cons) of student loan consolidation.

In short:

- Student loans and their consolidation are governed by the Higher Education Act of 1965 (HEA), governs student loans and their consolidation.
- It clearly states what people who have borrowed money under various federal loan programs or from multiple sources CAN consolidate their loans after they leave school.
- several loans with varying repayment terms and interest rates CAN be merged into a single loan; repayment CAN be extended up to thirty years - AND at a fixed monthly payment.

FIXED is the key word here. It may vary, but in general weighted average of the loans being consolidated affacts it.
Rates are capped at 8. 25%.
PLEASE NOTE that a borrower whose loans are all held by one lender can ask only that lender for consolidation (it's the “single holder” rule). Soem exceptions may apply.

IMPORTANT: a borrower can consolidate loans just ONCE.

In detail:

Reconsolidation

The law permits a borrower to obtain a new consolidation loan if:
- he has at least one outstanding eligible loan that was not included in the initial consolidation OR
- consolidated loans then borrowed again under an eligible loan program.

Benefits of Consolidating student loans

1) consolidation lowers a borrower’s monthly payment - naturally, by extending the payment period.
2) consolidation yields a single billing statement and removes the risk inherent if variable rates rise.


Drawbacks of Consolidating student loans

1) borrowers pay more in interest because of the longer repayment period and cannot benefit if rates drop after they consolidate.

Consolidation Loan Terms

The above eligible loans have 10-year terms. A consolidation loan repayment term can be up to 30 years. The term is determined by the total consolidation loan balance plus the balances of other education loans as follows:

• less than $ 7,500—10 years;

• between $ 7,500 and $ 10,000—up to 12 years;

• between $ 10,000 and $ 20,000—up to 15 years;

• between $ 20,000 and $ 40,000—up to 20 years;

• between $ 40,000 and $ 60,000—up to 25 years;

• $ 60,000 or more-30 years

Consolidation loan interest is fixed. The rate is determined by weighted average of the loans being consolidated, rounded up to the nearest one-eighth (1/8) percent. Rates are capped at 8. 25%.

Consolidation lenders can offer four repayment plans:

• Standard: the monthly payment amount is fixed over the life of the loan

• Income Sensitive: monthly payments are based on, and change with, the borrower’s income

• Graduated: monthly payments start low and gradually increase over the life of the loan

• Extended: for loans over $ 30,000, borrowers can extend payments over 25 years under a level or graduated repayment schedule

A borrower whose loans are all held by a single lender must request consolidation from that lender. This is called the “single holder” rule. But a borrower with a single lender can seek a consolidation loan from another lender, but he must certify that (1) he sought and was unable to obtain a consolidation loan through the institution that holds his Stafford or PLUS loan or (2) the holder would not provide a consolidation loan with an income-sensitive repayment schedule. People who have borrowed from multiple sources can seek a consolidation loan from any eligible lender.

Eligible Loans

The loans eligible for consolidation are: subsidized (based on financial need) and unsubsidized Stafford Loans; Parent Loans for Undergraduate Students (PLUS); Supplemental Loans for Students (SLS); Perkins Loans; and Nursing Student, Health Professions Student, and Health Education Assistance loans. A borrower must be in the grace period (the six months after leaving school) or have begun repayment on each loan he wants to consolidate. Loans in default can be consolidated only after the borrower makes satisfactory repayment arrangements with the loan holder or agrees to repay the consolidating lender under an income-sensitive repayment schedule.