by Kyan D.
Highschool goes by in the blink of an eye; one second you’re a nervous freshman, the next you’re getting ready to graduate and tackle new challenges at college. One of the main challenges is student debt, and more specifically how to manage it. Right now there is a student loan crisis and you should be able to know when you are going a little bit overboard into student debt, and when you have enough room where you can live a more comfortable life without crossing that line of too much student loan debt.
First a little background on student loan debt. According to data from the U.S. Federal Reserve, there are more Americans with student loan debt than credit card debt. With 45 million people in student loan debt who owe a combined $1.56 trillion. This is, in fact, $521 billion more than total U.S. credit card debt. Also, on average, a student finishing college is $29,000 in debt. College is expensive and you can’t be expected to not take any loans out; however, many times students take way too much out and aren’t prepared for the strain of having that debt as well as an entry-level salary. So what is the key? How do we stop from getting this debt and live a less stressful life? While it may seem obvious but the key is to borrow only what you need while understanding your repayment responsibilities.
Finally, onto the main question, how much student loan debt is too much? According to Road to College, “Mark Kantrowitz, an expert on student financial aid and student loans explained, ‘If total debt is less than annual income, you should be able to repay your student loans in 10 years or less’”. From a logical standpoint that makes sense, but there is also the idea that any debt that causes stress --which is nearly all debt-- is too much debt. At the end of the day the amount of debt that is too much comes down to you. If you are responsible, think all the way through before taking a loan out, and discuss and analyze the debt you will go into and after still believing you need that loan then the debt that comes along with it is a good choice and not too much.
Works Cited
Federal Student Aid, studentaid.gov/understand-aid/types/loans.
Kagan, Julia. “Student Debt.” Investopedia, Investopedia, 29 Aug. 2020, www.investopedia.com/terms/s/student-debt.asp.
Suzanne Shaffer Suzanne Shaffer counsels parents and students in the college admissions process and the importance of early college preparation. Her Parenting for College blog offers timely college tips for parents and students, et al. “How Much Student Loan Debt Is Too Much?” Road2College, 5 Oct. 2020, www.road2college.com/how-much-student-loan-debt-is-too-much/#:~:text=The student loan payment should,be no more than $200.
I liked your topic about student debt and it really opened me up to something that i never thought about until now. also like how you said to avoid it
ReplyDeleteKyan,as a Senior myself, college and student debt are both things that weigh on the back of my mind. I've looked through financial aid offers with a questioning expression because I've never known what's an appropriate fit for myself. Your blog was very nicely laid out and I appreciate the quote from Mark Kantrowitz. Very helpful because you're right--any debt is too much debt!
ReplyDeleteI had no idea that there was more student loan debt in america then credit card debt but i'm honestly not surprised. I think that it's a good plan to only take out what you actually need and try to make sure your debt is less then your annual income. But I also think that is easier said then done. I personally think that all debt is to much and that we should do our best to try and get out college with no debt but that's a nearly impossible thing to do in todays world. What do you think are some other ways students can pay for college to minimize the amount of loans they have to take out?
ReplyDeleteI enjoyed reading this, because I am planning on going to college and I know I will not be able to afford to pay for all of my tuition without taking out loans. It is interesting to see that more people are in loan debt rather than credit card debt, but I guess it makes sense, because of how many people are attending college these days. I am going to try not to take out more than I need from the loans so I can avoid having too much debt that I won't be able to pay it off.
ReplyDeleteI found it interesting that there are more Americans with student loan debt than credit card debt. That surprises me because as popular as credit cards are, there are more people who have debt from an education that they got or are still getting. It seems like finances during and after college is a tricky path because you need to take on debt to get an education and a job. However, if you don't get an education and don’t take on debt, you’ll have a harder time finding a job, or you might get a less paying job.
ReplyDeleteIt's very interesting to hear about something that is going to be apart of almost all of our lives in just a short amount of time. I was shocked by the sheer amount the average student has in debt after leaving college. I wonder why the price isn't a larger deciding factor when picking colleges. To be honest I might start considering price when I continue to look at colleges. So I can try and leave college with a degree and the smallest amount of student debt possible.
ReplyDeleteWith student debt becoming a more central topic in my life, I found your blog was able to give me a better perspective on what I need think about filling loan applications in the future, seeing the different payment plans, and seeing what I could handle.
ReplyDeleteHi Kyan! This article has been super helpful for me. I've always wondered what student debt can look like and how much is really too much. I know it's all very individualized but I appreciated how you talked about how if you debt is lower than you're annual income it can be gone in around 10 years. This sort of helps give a more definite idea of how long debt takes to pay back. Looking into loans and being responsible about it may sound obvious but many still seem to end up in a hole, how specifically do you think you will analyze loans and potential debt? For me, thinking about loans for college through the next coming years I based my college decision somewhat on what was going to set me up on the best financial path. I thought about how long the debt will take me to clear up once I'm out of college and also had to consider whether or not I was going to want to go to some sort of graduate program because that all factors in. Very interesting topic Kyan, thanks for sharing!
ReplyDeleteIt does seem like the answer to student loan debt is pretty simple, but why is it that so many people struggle with this debt regardless? I personally find it hard to believe that the reason so many people have this much student loan debt isn't just because of a little extra spending. This must mean that, either the majority of the US is so financially illiterate that they couldn't figure out that taking too much money in loans out could be bad for them, or that managing your student loans isn't that simple? This is all just speculation, though. Why do you think so many people continually leave themselves with so much student loan debt? I think you did a good job with your article regardless, though, as your paragraphs are well formulated. I just wish, though, that you had some visuals to go with it. Thank you for touching on this topic for us!
ReplyDeleteI think it is wild to hear about the statistics of student loan debt. I always heard people discussing their debt but seeing the number and the amount of money is ridiculous. This article was a great start into the subject of debt and student loans but there are many questions I still have. As much as the choice to avoid student debt is the best choice, are there any tips on how to avoid student debt or to decrease the amount of money you can take out in loans? I think this topic pairs great with budgeting and finding a budget where you can pay off your debt in 10 years
ReplyDeleteI cannot believe how much student debt America owes as a whole. This is a really important subject to touch on, so great topic choice! It is alright to need to get a student loan, but you need to know when you are in too much student loan debt because it comes to a certain point where it can be too much for sure and your money can be gone in a blink of an eye. So high schoolers should be aware of when student loan debt is just too much.
ReplyDeleteThis blog was very helpful to me considering I will be in college next year. I didn't know that there was that much money owed in debt! You set up your blog nice and organized so it was easy to read. I enjoyed how you added statistics to prove your thoughts true.
ReplyDeleteThis post tackles one of biggest problems with college: debt. Managing debt can be difficult, but I'm glad that there are good ways to manage it. You mentioned in your post that the amount of debt you take shouldn't be more than the annual income you expect to receive, it should be less than that. But what if you end up in a position that you didn't expect to be in when you were first considering your student loan debt? How would someone climb out of that financial hole?
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