Personal Finance

Student Loans: Starting out Behind the Eight-Ball

Statistics don’t lie—unfortunately, they often don’t tell the whole truth, either. While it is true that a bachelor’s degree can significantly raise your lifetime earning potential over a high school diploma, it’s also likely you’ll start that new career in a deep financial hole from student loans. The cost of higher education continues to rise, and unless you own or have access to the proverbial “silver spoon,” you’re probably going to need some degree of financial aid to pay for it.

A college education in the United States carries a higher price tag than virtually anywhere else in the world. Attending a private institution instead of a public school will cause those numbers to rise even further. And if your sights are set on a professional degree—that is, if you want to be a doctor, lawyer, or the like when you grow up—well, just make sure you complete the curriculum, because you’re going to need that job to dig your way out of the six-figure gorge you’ll be in once you get your license.

Now, all this is not to imply that post-secondary education is no longer a viable life choice, because that just isn’t true. But it is reasonable to consider beforehand and factor in the cost ramifications of a college degree. College graduates generally can expect to earn more than non-graduates (well over $1 million more, depending on the type of degree), and that fact can go a long way toward offsetting the debt incurred from higher education.

Certainly, debt is a common part of the financial fabric of this country. But today, America’s total student debt is greater even than our credit card debt, and the margin isn’t even close. Entering 2018, Americans owed “only” $834 billion on credit cards but a whopping $1.38 trillion on student loans. To make matters worse, almost 10 percent of those loans are seriously delinquent in repayment, at least 90 days past due.1

A full 70 percent of graduating collegians are in debt, and the average student leaves with about $30,000 in unpaid loans. The burden of student debt has been identified as a major factor in many millennials’ decisions to put off the purchase of homes or other big-ticket items.

Fortunately, the overwhelming magnitude of student debt has drawn significant attention, as it should. Loan consolidation and refinance options are available from the federal government and private lenders. But be careful: some programs are better than others; and each option has its own specific rules, regulations, and qualifications. The federal government even offers a loan forgiveness program for employees holding government- or public service jobs.

Additionally, companies have begun to offer student loan repayment assistance to their employees. Hundreds of organizations now include the benefit, and that number is expected to rapidly increase in the future. Employers are finding it to be a great way of retaining valued workers and attracting talented job applicants.

For example, health insurance giant Aetna provides one of the most generous education loan assistance packages available, matching their employees’ loan payments up to $2,000 per year, capped at a $10,000 maximum aid amount. And SoFi, a major education loan refinancing source, now provides its own employees up to $200 monthly toward student loan payments with no annual maximum.

If you’re drowning in student debt, there are resources out there to help you. Whether you already hold a job or are looking for employment, inquire with your HR representative about any student loan repayment benefits that might be offered. Whatever your situation, do your due diligence. Explore every opportunity that’s out there, and don’t wait until you’re going down for the third time!


1 Household Debt Jumps as 2017 Marks the Fifth Consecutive Year of Positive Annual Growth Since Post-Recession Deleveraging, February 13, 2018, https://www.newyorkfed.org/newsevents/news/research/2018/rp180213

2 Hundreds of companies are taking on their employees’ student loan debt, Annie Nova, May 24, 2018, https://www.cnbc.com/2018/05/18/hundreds-of-companies-are-now-paying-off-their-employees-student-loans.html

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