How Long Does It Take To Pay Off Student Loans

Red brick wall with Until Debt Tear Us Apart painted in black. Students are in debt because they can't pay off student loans

College students today are the most indebted college students in history. Student debt is making it nearly impossible for students to afford basic living expenses after earning their degree and graduating. Student loans are presently the second largest portion of household debt after mortgages. They are bigger than credit card debt.

National Average of 21.1 Years To Pay Off Student Loans

Nationally, more than 62% of graduates in 2019 had student loans. Their average debt was approximately $29,000. The average monthly student loan payment is estimated at $400.

It takes approximately 21 years to pay off a student loan. Yes, two decades. It’s hard to comprehend how four years of school could cost you two decades of payments. Can you imagine still paying on your student loans when your child may be heading off to college? That’s a reality for many parents.

Student Loan Forgiveness

I hear a lot of students say they will apply for student loan forgiveness. The statistics for student loan forgiveness are pathetic. Do not rely on loan forgiveness. You have a better chance of winning the lottery. According to Education Data Initiative, since November 2020, among processed applications for Public Service Loan Forgiveness (PSLF), 2.16% have been accepted. Barley 2 percent, it’s ridiculous. The chances of qualifying for loan forgiveness are very slim.

What Student Loans Will Do To Your Future

It’s hard to plan for your future when student loan debt is crushing you financially. Some students are forced to move back home because they can’t afford to pay off student loans as well as rent. Others delay buying a home because they can’t save enough for the down payment, or they can’t afford the mortgage payment alongside the student loan payment.

Many graduates are putting off graduate school because they don’t want to add to their student loan debt. They are not sure if the second degree will be worth the cost. Saving for retirement is frequently postponed, which is unfortunate as they miss out on compounding interest during those years.

A two story red brick house with a green lawn and trees in the yard. A blue sky is in the background. Buying a house is hard when you have to pay off student loans

The reason we go to college and get a degree is to get a good job and earn more money. We want perks such as a better work environment, retirement, health insurance, paid time off, and bonuses but we also want to afford a good lifestyle. Having a student loan can affect that lifestyle. The debt causes your overall net worth to drop which delays buying a home, having children, saving for retirement, traveling, or going on vacation. You shouldn’t have to choose between living your best life and paying off your student loan.

Student Loans Contributes To Stress

Trying to pay off student loans can have emotional effects and can cause a lot of damage, not just to your wallet. The mental havoc that it creates affects happiness and self-esteem. It can lead to anxiety and depression. Financial problems are one of the leading causes of divorce. Having that type of debt hanging over your head and controlling your life is a major stressor that you’re going to want to try and avoid at all costs.

The Best Ways To Avoid Student Loans

You don’t want to become part of the student loan crisis. It’s not necessary to go into decades of debt to earn a degree. With some planning, discipline, and smart decisions you can avoid graduating with student debt or at the very least with minimal debt. There are many ways to graduate debt-free.

It goes without saying, apply for FAFSA and every scholarship you can. Aside from doing that, the best ways to save are, attending a community college and then transferring to a university, living at home, getting a job with a company that will help pay for college through tuition reimbursement, and choosing the college and major that will ensure a good solid career in the future.

Save A Lot Of Money By Going To A Community College

One of the most beneficial aspects of community college is that it is a huge money saver. It costs a fraction of a four-year college. It’s the perfect way to save money while getting your general education requirements out of the way. In many states the first two years are free. This means, that if you take the right number of units, you have the potential to earn a degree for free!

In-State Colleges Are So Affordable

In-state colleges are public universities located in the state where you reside. There are many advantages to attending a state university. They have much lower tuition rates. They are often easier to get accepted into. The cost of commuting is less, and they are usually close to home. For my bachelor’s and master’s degrees, I attended California State University Sacramento. I received an excellent education.

Live At Home

I hear everyone sigh when I suggest living at home, but it’s totally worth it if you can. It will be one of the best financial decisions you can make while going to school. The biggest cost when attending college is room and board, it’s higher than tuition. This is the expense you want to cut most. Living at home can save you 10s of thousands of dollars and it can be the difference between getting a student loan or not.

Choosing A Good Major

Not all majors are created equal, some are more valuable than others. Here at Your College Sensei, you won’t hear me say the best way to decide on a major is to find your “passion”. Sometimes passions are not employable, they won’t earn a good income. I encourage students to pick majors that are employable and that are high earning. These two factors are of utmost importance when choosing a major. They will lead to excellent pay and good benefits, creating a solid financial foundation. These majors currently make the most money.

Work For A Business With Tuition Reimbursement

Some jobs will pay for you to go to college while you are collecting your paycheck. Many companies offer tuition reimbursement programs. Tuition reimbursement is an employee benefit where an employer pays for college coursework that is to be applied toward a degree. Eligibility requirements are different from employer to employer, be sure to know your employer’s requirements.

It Will Be Uncomfortable

The truth is, it’s hard to pay for college out of pocket. You must be willing to do what others won’t. You will need to make sacrifices and it’s important to not view them as negative as they will be essential to your success. Your determination and hard work will be worth it, especially when you compare it to being bound by massive debt for decades. Roll up your sleeves and get busy and it’s not necessary to pay off student loans for the next 20 years.