Student Debt Is the Not So Fun Part of Graduating
Student loans stick with you for a while, especially if you are a recent college graduate. Did you know that student debt can affect you years later if not taken care of? Many recently graduated students find it hard to find a balance between income and paying back student debt loans. With over 45 million people in the United States carrying student debt, it could hold back economic growth in the near future. With this rising issue at hand, how can we fix it? Today, we’ll go into a deeper look at the growing student debt problem in America.
National Student Debt
According to the National Association of Realtors, more than 80 percent of people ages 22 to 35, who have student debt and haven’t bought a house yet, blame their educational loans. In 2014, the average student loan debt estimates around $33,000. If not handled 6 months after graduation, your debt starts to accrue interest. Moreover, with most first job incomes, it can take anywhere from 5-12 years to pay back debt. It is this growing disparity between the debt-to-income ratio that prevents many college graduates from purchasing a home. At least one/fifth of people with student debt are denied a home loan due to debt-to-income ratio.
Student Debt and Credit Score
Student debt can also mess with your credit score and on the flip side rise it. Depending on how you handle your debt, minimum payments every month can help build your credit positively. Pushing off the debt until later will create a negative effect on your score. According to Forbes, seven in ten Americans mess up their credit score before the age of 30. With bad credit, your loans may not be approved, your ability to buy an apartment might be hindered, your insurance premiums can be higher, and much more may be at stake. You also might have difficulty purchasing a car; you could face harassment from debt collectors; and it might be hard to start your own business.
Ways to Eliminate Debt
There are a few ways to eliminate some of your student debt. The first way is to find state assistance for your student loans. About 46 our of 50 states offer programs to help deal with your loans. It is also important to find a payment plan that works best for you while paying off the minimum debt. This option can take a few years, but it is manageable. In some cases, some people take on second-weekend jobs to help pay back their debt at a faster rate.
Here at Empower Brokerage we also have agents who can help you get rid of any debt you accrue in less than 10 years. If this is interesting to you, give Empower a call 1-888-446-9157.