Class of 2015 to graduate with more debt than ever - KFVS12 News & Weather Cape Girardeau, Carbondale, Poplar Bluff

Class of 2015 to graduate with more debt than ever

CAPE GIRARDEAU, MO (KFVS) - This year's college graduates will earn more than a degree.

They will also be taking on a record amount of debt.

Mark Kantrowitz with Edvisors tells the Wall Street Journal, the average 2015 graduate with student loan debt will have to pay back more than $35,000.

That is more than any other class before them.

On average, a typical early career salary for a graduate of a Heartland university is $40,233.

If that graduate puts 8 percent of their income towards their loans, it will take them more than 17 years to pay off that amount of debt.

It is a nerve-racking situation for some college students at Southeast Missouri State University.

"Since I am mainly using loans to pay for school it's just a stress really and the fact that I am maybe trying to maybe get a job to pay for what this loan would pay for and not take that loan out, it's hard," Sophomore Taylour James said.

"Trying to pay for starting your life up and having loan debt it's just harder to get everything situated and figured out," fifth-year student Chad Holloway said.

Holloway knows a college degree is worth it.

"In the long run getting a better education is better for yourself in the future, but it's still really expensive," Holloway said.

That is why some just hope they chose the right profession.

"I think I've picked a pretty good major," James said. "Sometimes I think maybe I should've gone the nurse doctor route but I think I'll do pretty good."

Derieck Hodges with Financial Planning Advisors offers the following tips to reduce and eliminate student loan debt:

  1. Pay additional principal. A borrower with $25,000 of debt at 6.8% interest on a 10-year payback schedule will owe $287.70 monthly. By paying $500 a month instead, interest would be reduced by nearly $5,000 over the length of the loan and the loan length cut in half.
  2. Know Your Numbers. There is no substitute in having a monthly spending plan. To avoid carrying a student loan for the length of the term you need to make extra payments. Find extra room in your budget for the additional principal payment is a great way to do this. Are there things in your budget that are less important than being out of debt? If so, you will be more motivated to get out of debt faster.
  3. Consider consolidating loans. There are pros and cons with consolidating so be careful.
  4. Does your employer offer help? Some companies provide assistance in paying student loans back. This is especially true with government employees, nurses in areas where there are shortages and teachers.
  5. See if you qualify for a tax deduction on the interest you pay.
  6. Consider a part-time job to accelerate the pay off of the loan.
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