Average Graduate Student Loan Debt

Due to the rising costs of higher education, most US students are not able to successfully complete a four year undergraduate degree without having to deal with student loan debt. College loans have made post secondary education more accessible to students but on the other hand, due to this financial aid or loan, an average graduate student loan debt rises to an astounding amount. The government provides different types of loans such as direct subsidized loans, direct unsubsidized loans, direct consolidation loans and direct plus loans. According to the United States Department of Education, a student may be able to borrow $5500 to $12,500 per academic year via these federal loan programs.

Private student loans are offered by non-governmental financial institutions. To acquire these loans, the applicant or the student must provide guarantee to the lender. Other factors of such loans include incentives for lenders, payment options, origination fees in addition to the principal amount and varying interest rates. Applying for a college loan is normally the first financial experience for most undergraduate students. Thus, most students are not completely prepared to manage their college debt. This is why the practice of asking students to complete loan tutorials before student loans can be issued, is becoming increasingly popular.

Average debt of college graduate and debt trends

Most students in the US bank on student loans to enroll in an undergraduate academic program. According to CNN, the average college debt was $29,000 per student in 2012. Depending on the academic field pursued by the student, in addition to scholarships and grants granted to a student, a student may have to take out a loan ranging from $26,000 to $100,000 due to the increasing costs of higher education.

According to the statistics provided by the same website, average college debt after graduation could sum up to $26,600 for students graduating with undergraduate programs. The website also pointed out that this figure could considerably rise in the case of students who attend private colleges or universities. The rising student debt trends are a direct result of a growing population and increasing post secondary education costs.

Private loans VS federal loans

One of the biggest mistakes that present-day prospective undergraduate students are making is that they fail to fill out the FAFSA application. When a student fails to file the FAFSA forms, he or she misses out on an assortment of grants supported by the federal government, in addition to a wide variety of independent scholarships and financial aid awards. Therefore, the student then has to fulfill the entire cost of higher studies by getting either a federal loan or a private loan.When students fail to file their FAFSA application, they try to finance their undergraduate studies by acquiring private loans at high costs, therefore increasing their student loan debt.

Federal loans have comparatively lower interest rates and include student-friendly repayment options. On the other hand, private loans are issued on the bases of credit history and collateral, like any other loan in the financial market. However, most students do not possess enough collateral or credit history and thus are inclined to involve parents and guardians.

These private loans have comparatively higher interest rates and less student-friendly repayment options including loan application fees and early repayment penalties.

Managing Average College after Graduation Debt

Both private student loan providers and the federal government have a mutual interest in repayment of the student loan and this makes managing student loan debt easier. Several repayment options are available, and a student may be able to choose his or her student loan repayment method from among them.

Several of these options include adjusting payments according to monthly income, repaying the loan after graduation or after getting a job and allowing students to adjust their entire student loan debt into one easily-manageable loan. In addition to this, some students may also qualify for student loan forgiveness programs administered by the federal government.

These flexible options make it comparatively easier for the students to repay their student loan debt.