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Fighting Student Loan Debt

Some debt is good.

Consider the farmer’s attitude toward natural fertilizer. Using it may be an assault on the olfactory senses, but you can’t argue with the results.

The same goes for your college debts. Student loan debt isn’t bad debt, it’s good debt. Think of it as a down payment for your future – that’s the mindset you’re looking for. After all, studies show that in addition to the inherent benefits of a higher education, a college degree is worth 75% more than a high school diploma or more than $1,000,000 over a lifetime in the workforce.

But it’s still debt. And you’ve got to pay it off. And brother, do Americans have a lot of student debt to pay off. In the next few blogs we'll look at great ways to handle and eliminate student loan debt.

Here’s a look at the facts:

The average American college student owes about $15,000 in loans after graduation. Quadruple that amount if you're the average grad school graduate.

According to the Washington, DC-based State’s PIRG Higher Education Project, 39% of student borrowers now graduate with unmanageable levels of debt, meaning that their monthly payments are more than 8% of their monthly incomes.

According to data from the Department of Education's National Postsecondary Student Aid Study (NPSAS), not only are the majority of students turning to loans to finance college, but debt levels are also escalating. In 1999-2000, 64% of students graduated with student loan debt, and the average student loan debt has nearly doubled over the past eight years to $16,928.

In 1999-2000, 71% of students from families with incomes less than $20,000 graduated with debt, compared to 44% of students from families with incomes more than $100,000.

55% of African-American student borrowers and 58% of Hispanic student borrowers
graduated with unmanageable debt burden.

Published Jan 02 2007, 04:19 AM by moneycoach
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