Student Loans by the Numbers
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While it’s been said you should never underestimate the value of a college education, neither should you underestimate its price. Without proper financial planning, you could be paying off those student loans for the rest of your life. College tuition costs are rising at twice the rate of inflation, in part because colleges are attempting to make up for reduced public funding under the previous administration and passing the costs on to you and your parents. The Obama administration has proposed a massive overhaul of up to $6 billion dollars in federal loans but many fear this will lead to the same kind of death spiral that got us into a financial mess with the housing crisis. The numbers tell the real story.
We’ve partnered with CollegeScholarships.org to bring you this infographic which shows you exactly what that degree may be worth and whether it will make economic sense in the long run.
For more personal finance visualizations see: WallStats.com
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43 Comments so far
leave a commentOkay so now that i am out of school and paying a crazy amount of money each month what can I do to lower that monthly payment. I would like to consolidate and refinance my student loans. Who should I call?
If these are federal student loans (PLUS, Stafford & Perkins) the only place still consolidating these types of loans is the federal government (800-557-7392).
Good luck… I tried to consolidate my loans out of school and was denied by half of the banks for not having enough credit! How’s that for irony! The banks that did accept my offered me a higher interest rate than i would have just paying on the individually.
For now i have to pay on them individually until the banks start letting go of their money.
@Vicki, sounds like you had all private loans you were trying to consolidate. Those things are SO hard to consolidate. Every previous program for private student loan consolidations has sucked. If only a bank would wise up and create a decent program for private student loan consolidations they would make a KILLING! I have a feeling since the Govt will be doing away with the federal side of things the private side will get a lot better. Fingers crossed for a good PSL consolidation program in the future.
Sallie Mae offers student loan consolidations. My brother in law always gets their promo in the mail. The government also has the consolidation program too:
http://www.ed.gov/offices/OSFAP/DCS/consolidation.html
Banks offer too but I’m sure nowadays, you would need to have prestine credit to qualify. There are many options out there, try googling “student loan consolidation”.
Good luck!
LOAN BUSTERS!! (ghost busters)
depends what kind of student loans you have (private or federal), look on http://studentloansforcollege.org/ to find out what your best options are and to get consolidation info. hope this helps!
I busted my ass so hard to come out $42,000 in debt, and I’m damn proud of it.
I went to a Penn State branch campus for $11-14k per year (it increased fast over 4.5 years) which cost me about $60,000 with books. Less than half of my loans were subsidized so tack on an extra $4,000. By the time I graduated, school had cost me $64,000. A public branch campus…
To get there, I lived in a really bad part of town for $300 a month, utilities included. I worked OVER 40 hours per week throughout school, all 4.5 years, between 2 and sometimes 3 jobs. I lived on Ramen noodles, hot dogs, and natty light.
Something needs to happen about this. It shouldn’t have to be this hard. How much more can our generation take? When was the last time it was this hard to rise up in society? The American Dream is at stake here, people.
I went to PSU’s main campus and ended up coming out with $64K in loans after completing my BA in three years. I worked 30 hours/wk or more for the University and even kept working for one of the departments for two years after graduation. Not only am I paying out over $500/mo in loan payments, but I was only making $26K/yr from the school. As I was also part time on two budgets to get my 40 hrs/wk, PSU wouldn’t even give me health insurance except for a loophole that I found because they accidentally enrolled me in the retirement plan.
Nearly 5 years out now, I’m still paying $500/mo and haven’t missed a loan payment but I have next to no savings even while making $57K at my new job. This is absolute madness. I’m definitely putting off most of my life goals and major purchase because it’s unlikely I’ll be able to afford any of it until I’m in my mid-30s. Thanks, America. Thanks.
Agreed. Except on your last sentence about the American Dream. You’ve got to be asleep to believe in it — the American Dream is just a myth man. One way to start fixing this problem is not by limiting student loans. Rather, it’s by basing loan repayment on individual earnings after college. Better yet, accrue debt credits as you enroll in college which must be repaid later in life as a function of earned income. We busy ourselves too much on the front-end of paying for our education when the gains aren’t realized until several years after finishing (if you finish at all). So, the funding system is backwards. We ought to fund outputs/outcomes rather than inputs. But, the student loan industry, banking lobby, and higher education folks are happy with the status quo.
Just do what I did! Get your associates before joining the military and let the government pay for your bachelors or whatever else you would like. Then when you are out in 4-8 years you have saved money and have your degree. Just make sure when you sign up you don’t sign up for a job that will make it hard to take classes. For example security forces or working on the flight line. Some jobs in the military is pretty much welfare at its best.
I am currently stationed in Germany, drinking all the beer I could ever want. Not only that if you are just out of high school and you get stationed here you can legally drink. You don’t have to worry about jumping over bushes and hiding beer from the R.A.
P.S. No, I am not a recruiter I am just telling you the truth.
Better than that, go to a good school, graduate with your bachelors. While you’re still an undergrad, get an internship with any military base nearby (usually a research facility). Upon graduation, start working for them.
Most people think that you have to serve as a soldier and then they will pay for your tuition. In actuality, you can be a civilian, and they will assume all of your student loans! Sure, you owe them “service,” but this type is at a desk, not in a foxhole. How much service? Never more than 3 years from when they make the last loan payment for you.
Get your education from age 18-21? Check. Get a good paying job out of college? Check. Have that job pay off your $100K worth of student loans? CHECK.
Look into it… it’s the way to go. Living proof right here.
Well I agree with Brad, I did a similar path. Did my first year then joined the National Guard. In some states like Florida they pay 100% of any 4 year degree. So I got a BA for the University of Florida for just the cost of the first year, which I did work 2 jobs to pay for. I went on to get 2 Masters by working for the Universities I attended which both paid and recieved free tuition and for at least 1 degree got addition money from the military. Now I was never a military person and orginally just did it for the money, but I now have been in 12 years and became an officer. While it is not for everyone it has come in handy.
1st. I have additional income every money and as an officer it is not bad at about $700 per weekend after taxes. Not bad for 2 days work. It also doesn’t count against unemployement so it makes unemployement a little less bad.
2nd. I am always employed. I never have that evil interviewer question of “why is there a break in your employment history.”
3rd. I have medical insurance for $40 per month. So my employer cannot hold health insurance over my head. That is a great thing. Along with that I have a 401k, Pension, Life and Dental Insurance even while unemployed. This allows me both to now worry about my benefits and makes it easy to freelance since I don’t need a companies benefits.
4th I am part of the “big green faternaty”. What this means is that I always have people in the know helping me get jobs. My last three jobs have been just a handshake because I was in the military, they never even looked at my resume. This week I was sent 2 job offers just because of my clearance and military background.
5th In my state all military income is not taxed and my company pays differental pay with the military so I never go down in pay while in the military and actually get a bonus because roughly 1/3 of military pay is not part of base pay so I make 33% more when in uniform due to my civilian job.
While the military is not for everyone and yes you may have to go to places you did not ever want to see. The long term benefits are amazing and make life much easier.
NO I AM NOT A RECRUITER. If you had asked me this 13 years ago I would have told anyone not to go in the military because I was an unexperienced kid. Now my biggest regret in life is not joining when I was younger…
Going to college isn’t as meaningful as it used to be. There’s so much access to information now, you can get a real world education and forge your own path. Of course, college is required for certain professions, but most careers don’t require a college degree at all.
Sorry Michael, I totally disagree. I hope you’re not making an excused for yourself to avoid college.
I skipped college, collected some “valuable” real world experience, ended up w/ a decent job at a great company, and have earned the respect of my pears. I make about half as much as they do. Basically I do engineering level work for a labors’ wage and have been promoted about as far as I can possibly go within the company without an engineering degree.
BTW: I’m now “supervised” by someone with no experience and an IE degree.
I’m quitting my “good” job and going to college full time spring semester ’10; all the while wishing I hadn’t waited.
“most”?? as in more than 50%? where did you find those statistics? I seriously doubt your claim.
Move to Socorro, New Mexico and work for a year to establish residency, then go to New Mexico Tech for a top-notch engineering/cs degree, which will probably cost you a total of $20k (and that’s on the high end, includes room/board). I went there for my masters in cs a few years ago and it _might_ have cost $4k. Then again I had a grad assistantship and didn’t pay a dime.
Simple college advice:
If you’re having to take out loans, do your first 2 years at a community college, which is much cheaper. Make sure you’ve worked it out with the 4-year college that they will accept your credits.
Finish at an in-state state college over a private college or out of state school. The quality of education is not that different.
Get a degree in something that you know will get you a job that will pay off your loans. If you are not on scholarship or having your dad pay your college loans, get a major degree that is *useful* and a minor that is fun. You are putting yourself in debt for the next ten years – while it may be fun to major in medieval lit, unless you have a career path in that it is not worth the cost to the rest of your life. There are many more opportunities for an engineer to play music, sing, dance, read, and travel in their spare time than there are opportunities for theatre majors to get jobs in engineering. If no one will pay you to do what you love, then what you love is a really cool hobby, not a degree or a job.
I personally went to a private college for my Bachelors Degree but I knocked out all of my general and elective courses before heading to the private college. I was also fortunate enough to be employed at a company with an okay tuition reimbursement program for most of my college life. Even though it took me a while to finish up, this route saved me about $50k overall. Yes, I was a little upset I didn’t get to experience the “real” college life but this route was definitely worth it in the end.
I agree with you Brad. When I was getting ready for college, I looked at the finances of it, and decided to apply for a ROTC Army scholarship. The benefits were great, with school covered and training on top of it (I also liked how I would be forced to exercise and stay in shape, but some may not like that part). The one big down side was you needed to invest 4 years of service after school. After school started though I figured out a way to work it out with minimal loans, and no ROTC, so I dropped it. Some friends didn’t drop it, and stayed through. They now have a whole lot of lifetime benefits I didn’t know about including: excellent medical coverage for life, excellent retirement benefits, USAA insurance for everything (this is big btw), and other things I can’t think of right off. Point is, I almost wish that I stayed in. Thereby I wouldn’t have any loans at all right now (although they aren’t much), and get all the benefits.
Don’t go to a 4 yr college. Go to a vocational school and learn a trade like welding or auto mechanics.
If colleges were public schools that’d ring you up in taxes and we know how anti-tax everyone so irrationally is. The government obviously wants to keep people in school, and our colleges are obviously businesses who have the right, as any business does, to charge what ever price they feel their product is worth.
What do you people expect, that the government just prevents you from being able to enter school at all? You don’t have to accept the loans, you can just not go to school and teach yourself what ever you need. Also deferring from buying a house when it’s convenient for you is perfectly reasonable if the education causes you to be capable in a higher paying job.
How arrogant and bloated can people who perpetuate this crap be? Oh that’s right, you want everything your way on your time as you see fit. You guys forgot you were born in to the natural world where what you have is pretty god damn good even if it isn’t perfect.
There are millions of pages worth of thoughts and problems beyond what I’ve written here and most people will never see anything beyond their fat asses and bisching about the world around ignorantly.
$12k in debt from undergrad (parents helped with the rest and I’m very thankful)
$30k in debt from grad school
Paid off both in 3.5 years. I did this by realizing that I would not escape them(either being a teacher or some other options were not in my career path) and personal bankruptcy does not escape you from stafford loans. I decided to pay if off as quickly as possible to save on interest(6.8%). Now I’m completely debt free and saving up for a house. I avoid monthly payments or subscriptions whenever possible and pay off purchases within the month.
I know some may argue you can make more money in stocks, but there is nothing better than a guaranteed return of saving on interest especially in this economy and not being in debt.
Paying off school and my car loan(another $30k) has been one of the best feelings, knowing that I don’t have to go to work to slave away at my monthly payments. It’s worth it. FYI, I followed Dave Ramsey’s snowball strategy.
“in part because colleges are attempting to make up for reduced public funding under the previous administration and passing the costs on to you and your parents”
but
mainly because they have no one to answer to when they raise prices, they gouge consumers more than any industry in the world.
Tuition and tuition for Ph.D.s in a variety of sciences are quite often paid for by government grants, meaning you don’t have to take out loans to get your advanced degree.
Also, some graduate programs have MD/PhD degrees in which the tuition for MD side of the degree is ALSO covered, meaning you come out in (say) 7 years without that huge MD tuition debt.
Some professions you can have the ability to have the loan paid off in full for you. Teaching is the only one that comes to mind, but I’m sure there our others out there.
Jason, my son is currently in college to be a high school math teacher. Can you tell me more about your statement “have the loan paid off in full for you”? Where can I get more info about this? Thanks!!
And to think they don’t have this problem in other countries…
Ah so happy to be living in the great country of Sweden, where if you didn’t already know…. most of our universitys are 100% free =) hihih and also healtcare, and pretty much public transportation too… and ehm, beer aint to expensive here also ;D
I think the person that made this graphic needs to get an education themselves. At the very beginning of their graphic, what looks like stickies on a notepad, they start with sound logic until the last step where it goes from “Making college more affordable and psychologically cheaper” to “Which causes schools to raise prices. And then…”. There is absolutely no logical connection here unless they are claiming that the supply of college educations is limited and that the increase in demand will drive the price up (classic supply and demand theory). In truth, the increase in demand means that the colleges can grow and SAVE money via economies of scale so their costs should go down or at least offset some of the rising costs due to other economic pressures like inflation.
To me this looks like just another cheap shot at Obama by a dumbass Repuglicant since he is mentioned by name on the first sticky. Let’s get some FACTS straight here, the cost of college has been skyrocketing for much longer than the 10 months that Obama has been in office. Absolutely nothing was done prior to Obama’s proposed overhaul so all of the other politicians, Democrat and Republican, were quite happy to let the banking industry gouge students. God forbid that Obama try to help working class Americans attain their dreams of a better life rather than helping the rich get richer like the Republicans did for the previous 8 years. The author author of this article, by criticizing Obama for trying to do something positive, makes them self even lower than the politicians that did nothing since they are actively trying to undermine his efforts to make things better.
No solution is perfect, some will make things better and some wont but one thing is for sure, doing nothing never fixes anything and I for one am pleased with the changes Obama is making.
my original loan was for $13,000 because i never got a extremely great paying job i’ve always paid the monthly amount or a little over. right now i have paid back $19,000 and still owe $3000. so for a $13,000 loan i’m paying back $22,000. if banks can’t get away with this blatant over charge why can the feds.
Like the article says… you’ll end up paying out the ass at first, but in the end it more than makes up for it. It’s all in what you decide to go for and where you land with it.
$800,000 extra over my lifetime sounds pretty nice, but with so many people going to college (and going for higher degrees to earn the "big bucks") that number is likely overstated.
2 years at a community college to get all of my lower level classes- $4,000
1 year at a public college to get a BA- $9,000
Debt paid off in 2 years.
Why doesn’t anyone ever mention the fantastic system of community colleges available?? Most 4 year colleges will take transfer credits or offer bridge programs!
In finland you get any degree your willing to study for free.. Actually, yout get a small monthly “salary” when you study..
Just rubbing it in
It’s so great to see this! I went to a private art school to be a photography major, and my end student loan debt hovers around $150,000.00 with the interest tacked on. The majority of it covered school expenses, but quite a bit of it was the cost of living. Its refreshing to see this because I feel like I don’t know as many people as far in debt as I from student loans. Most of the graduates from my school were, but no one talks about it – I feel like I always see graphs with students with $30,000.00 in debt and I always think “lucky!” I’ll have paid $18,000.00 in loan payments by next June and like to know other are suffering as much as I
great article and it really shows the true facts of education system !!
i don’t want to be under debt, i won’t end up commiting suicide …
Awesome graphic. And on top of all this debt and expense you’ve got personal and living (and beer) expenses beyond room & board, most of this paid on credit these days. What did that Sallie Mae report that came out in April say? That 50% of college students have 4+ credit cards and only like 15% of them are able to pay them off each month. Ouch. Rack that up with the $130K total…ouch!
Two points, only one of which was really addressed in the above article:
1) Even with the rising tuition costs and potential for huge debt, a college degree is worth it (yes, even a liberal arts degree!)… you have to think not just about salary and job opportunities now but even 10-30yrs down the line. I know I was frustrated coming out of graduate school $40K in debt (that’s even after lots of scholarships). I was working as a paralegal making the same salary as quite a few friends with similar jobs who didn’t go to college and didn’t have any debt. I started to wonder “were these degrees even worth it?” But now ten years down the road, I’m getting promoted where others without degrees are not considered. I have a friend in her forties who’s been an admin assistant for literally decades and she can’t get promoted without a degree, so she’s going back to school while working full time. Even if it takes the max amount of time to pay back that loan it will still be worth it.
2) I know this is a budgeting website so it’s mainly concerned with the bottom line financially, but keep in mind there are many more things to consider in making life decisions. The article highlights the cost of private vs. public colleges, and the fact that many people defer home ownership, marriage and family because of student loans. It’s one thing to be financially responsible but another to let an irrational fear of debt control your major life decisions. For example, my private college was pretty expensive but it’s the only place I could have had the wonderful experience I had. A two year community college or public state college might have been a lot cheaper, but I wouldn’t be the person I am today with the knowledge I gained and the friendships I made. Please understand I am not knocking a public education or community colleges. I also have quite a few friends who did their required courses at community colleges before transferring. I’m simply saying that you have to pick the right fit for yourself and sometimes the more expensive school is worth it.
Also, it’s not the end of the world if you get married and have babies before you’ve budgeted out their college tuitions, or if you raise a family in an apartment and drive used cars while paying off your loans. As a single mom who worked very hard for her degrees, I may NEVER be a homeowner and I am okay with this. If you wait to have all your ducks in a row before you start “life” you may find you miss out on a lot.
I went to the University of Michigan, and my parents paid for all of my tuition and fraternity dues. I have no loans, and am going to spend the Spring in Barcelona. Life’s not all bad guys.
Get straight As in high school and apply for full ride scholarships and live at home and work part time to keep your old car running. Go to a grant funded graduate program. Come out with a Ph.D. and no debt. Thats what I did. unfortunately I racked up my debt after grad school
@Facebook User: If you have no savings with $500/month student loan payment on $57,000 salary, you REALLY need to re-evaluate your budgets – I make the same live in a big city and have $1,300 per month payments and I am doing JUST FINE.
If it is really that bad, man up and get a second job until you have atleast enough to cover 6 months of bills. You might find yourself more open to take risk or make moves in your profession which could help increase your salary knowing you have this to fall back on.
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No one twisted your arm to take out loans. Ultimately – as with most students, applying for student loans was my decision based on circumstances which I created for myself. Had I focused on school, I would have been eligible for scholarships or federally subsidized loans which could be consolidated, but I didn’t and now I am paying for my choices.