It’s no secret that student loans can be difficult to pay, but newly released statistics show just how much people struggle with the debt they take on to pay for their education. Figures Released by The Urban Institute discovered that a million people a year defaulted on their student loans.
This staggering figure is just one amazing number out of many. Let’s look at some other mind-boggling numbers from the website Make Lemonade. After digging into the numbers, they found that the 44,000,000 borrowers they looked at owed around $1,500,000,000,000. That’s a trillion and a half dollars in student loan debt! And the amount of debt that students are taking on is increasing. They found that the average student who graduated in 2016 ended with $37 thousand while those that graduated in ‘17 walked away with $40 thousand in debt.
Looking into the future, The Urban Institute predicted that 40% of all students who took out loans would end up defaulting on them by the year 2023.
It’s clear that many people are taking on more debt than they can afford, but if you dig deeper, you’ll find that the story isn’t as clear-cut as you might think. For one thing, it seems as if people who take out loans worth less than five thousand dollars actually ended up defaulting less than those who took out more than thirty-five thousand.
If you’re one of the many people, who are currently struggling with your student loan payments you should know that there are options. Let’s look at some of them.
The important thing to keep in mind is that lenders want to get as much money as they can and would rather find a way to get some of it than watch you default. The first way you can work with them is through the help of loan payment plans offered with government assistance. You can work with the government to repay your debt based on how much you owe rather than the original terms of the loan, helping to lower the payments you have to make each month.
A deferral is essentially a break in payments where you don’t have to make payments. It allows you to take a pause so you can regain your footing. Some deferrals also put a pause on interest while in others it keeps going. Check to see what sort of deferral is available on your loan to see if it is an option that might work for you.
If you’ve taken out more than one loan, then you might be able to combine them into one loan. There are organizations that will help you consolidate your loans, making them easier to pay. Unfortunately, you won’t be able to bring your interest rate down in the future with this option so be sure to make sure you’re OK with the rate you’re offered before agreeing to consolidation.