Let’s start with a general picture of the student loan landscape. The most recent data indicate there is:

• $1.71 trillion in total U.S. student loan debt  
• 44.7 million Americans with student loan debt  
• Defaults were halted as part of the pandemic relief measures — before the pandemic, 11.1% of student loans were 90 days or more delinquent or are in default.  
• Monthly student loan payments were halted as part of the pandemic relief measures — before the repayment moratorium, the average payment was $300.  
• Average Student Loan Debt: $32,731  
• Median Student Loan Debt: $17,000  
• Median Student Loan Payment: $222  
• Student Loan Delinquency Or Default Rate: 10.8% (90+ days delinquent)  
• 56% of seniors graduating from public and nonprofit colleges in 2019 had student loan debt.  
• 48% of borrowers who attended for-profit colleges default within 12 years, compared to 12% of public college attendees, and 14% of nonprofit college attendees.  

(Data via the U.S. Federal Reserve here, and the Federal Reserve Bank of New York here.)  

As these student loan debt statistics show, the cost of attending college can be a heavy burden for a huge portion of Americans.  

Borrowing money to finance a college education can be a very good investment. It can have a rate of return higher than just about anything else in which you could invest your money. On average, college grads earn 84% more than people who have only a high school degree. Borrowing money to finance a college degree can be one of the best investments you’ll ever make but you need to be smart.

One of the best things about going to college is that it allows experimentation and learning, to explore things they would have never been exposed to otherwise.   

College allows students to discover new and exciting careers that would have never occurred to them otherwise. Some young people go into college believing that they will major in one subject only to graduate with a degree in something entirely different. 

A recent study revealed that 53% of recent college graduates are still either jobless or underemployed – basically because they chose the wrong major. If you’re borrowing money to fund your education, it pays to pick a major that will lead to a secure career. Many of these careers are found in the STEM (science, technology, engineering, and math) field.   

For example, the major that’s most worth borrowing money for is biomedical engineering followed by software engineering, environmental engineering, civil engineering, and petroleum engineering.  

Conversely, the majors that rank lowest in job opportunities are the “soft” sciences such as psychology, sociology, and philosophy.

It’s possible to pay it off in just a couple of years but sacrifices need to be made. Some people move back in with their parents for a certain amount of time. Others prefer to pick up a part-time job. This might be the best answer to paying off that student loan debt. There are many part-time jobs available, especially in the hospitality, food service, and telemarketing industries. These jobs may not pay a great deal but if you were to put all the money you earn into paying off your student loan debts, you might be surprised at how quickly you become debt-free.  

If You Are Already Struggling With Student Loan Debts, Here Are Some Tips That Can Help

If you’re currently struggling with student loan debt there are alternative ways to get it under control:   

Apply for a Forbearance

Forbearance provides a temporary break, providing timeout on paying down the loan for a year. However, interest will continue to accrue and will be capitalized. You might be eligible for forbearance if you can show a severe financial hardship. There are also what’s called mandatory forbearances you could apply for if you are doing a medical or dental internship, in a national service position, or doing a teaching service.  

Check Out an IBR

Another way to deal with student loan debts would be to apply for an Income-based Replacement or IBR. If you qualify for one of these, your monthly payments would be capped at 15% of your discretionary income. There is also a program called Income-Contingent Repayment, where the payments are capped based on your family size, income, and the amount of debt you owe.  

Pay as You Earn

Lastly, if you are a recent college graduate there is a program called Pay As You Earn (PAYE) where your payments would be 10% of your discretionary income.

Taking on a student loan debt can be a wise decision if it leads to a meaningful career. However, students need to be aware of the burden they can carry later in life and plan accordingly to reach their life goals.