Some Facts About Student Loan Debt in the USA
These days, a college education is more expensive than ever before, with many students taking on debt to fund their schooling. In the past, earning a degree usually resulted in higher-earning jobs and more economic security.
Unfortunately, that isn’t the case anymore. Once they graduate high school, modern students must ask themselves if going to college is “worth it” if college is even financially within their reach at all. Here are four key facts about student loan debt in the USA.
● The Number of Borrowers Has Tripled
In 2019, 21% of US households had student loan debt, up 8% in 1989. As of March 2022, over 40 million US adults have outstanding federal student loan debt with an average balance of $37,113. This number doesn’t include students who use other borrowing options, such as private loans, credit cards, or home equity lines of credit.
With the number of borrowers continuing to grow, more adults are finding themselves entering the workforce only to devote a significant fraction of their paychecks to student debt.
● There Are More Women Than Men With Student Debt
Women presently hold two-thirds of the outstanding student debt in the US. Therefore, most US student debt is held by the population with the least earning potential, with women making 75 cents to the dollar compared to their male colleagues.
● The US Government Backs 92% of Student Debt
This is why canceling student debt has emerged as a political hot button issue. This type of debt impacts the buying power of the emerging middle class, but it also burdens the economy’s overall health. In short, it doesn’t just affect students but all Americans. The long-term impacts are yet to be seen. However, the outlook isn’t good if adults are faced with working in an unstable economy where they are less likely to pay off their debt.
● There Are Options to Lessen the Burden
Because student loan debt is such an important issue, the US government is leaning slowly towards enacting programs and legislation to cancel the debt or make loan forgiveness non-taxable for students. Today, the most accessible way to lessen the burden of student debt is probably a student loan refinance that restructures an individual’s debt with a lower interest rate and a fixed term.
According to Lantern by SoFi, “refinancing is a great solution for working graduates who have high-interest loans,” making it possible for them to make flexible financial decisions without their debt weighing them down.
Putting students heavily into taxpayer-held debt means that Americans face future generations who can’t own homes, start businesses, or send their family members to college. Fortunately, public awareness combined with legislation, such as tuition-free college and debt cancellation, can help the pendulum swing the other way.
Until then, new graduates who have taken out loans now have the option to refinance their loans under more favorable terms as they start their working careers.
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