Average Rate On Student Loans

Average Rate On Student Loans

5 min read


Average rate on student loans

The average interest rate on federal Stafford and PLUS loans is 4.55%, according to Sallie Mae’s website As of September 2012, total outstanding student loan debt topped $958 billion, according to the U.S. Treasury Department. That includes private-sector education loans, like those taken out by students going to college and graduate school. Private loans were almost $800 billion at the end of 2011, according to the Education Department

Average salary of new graduates

According to PayScale, median salaries for newly graduated workers vary widely by location. In New York City, for example, graduates earn about $49,000 per year while those in West Virginia only make $30,000 annually. The average starting salary for a grad in the United States is $39,000, according to the Bureau Of Labor Statistics

Most expensive cities to live in

According to WalletHub, San Francisco tops the list of top 25 most expensive cities to live in. Not surprisingly, it ranks just above Seattle. The two Pacific Northwest metros are followed by Washington D.C., Boston, Los Angeles, New York, Miami, and Chicago. Read More…

Average Rate On Student Loans

Average Student Loan Rates | Source

The average student loan rate is $4,386 per year, according to Bankrate.com’s latest study on student loans. That amount includes both direct and indirect costs. Direct costs refer to payments such as interest, insurance and enrollment fees. Indirect costs are those associated with college tuition, including books, room and board, transportation and clothing.

How Much Do Students Actually Pay? – National Association of Consumer Bankruptcy Attorneys

According to NACBA, students are still paying off their debt even after graduation. The average student loan borrower owes about $25,000 before they graduate, and close to $30,000 after they receive their degree. And the average graduate owes nearly $35,000.

What Is the Average Annual Cost of a Degree at Four-Year Colleges? – Bureau of Labor Statistics

In 2010, the estimated annual cost of attending four years of public colleges was $12,700, and the cost of private schools was $32,600.

College Costs in U.S.: Rising But Not Too Fast – Pew Research Center

Over the past 10 years, the cost of higher education grew by 37 percent. However

Average Rate On Student Loans

$26,000 per year: Average student loan debt

The average amount of student loans owed by undergraduate students is now at about $26K per year. That’s up from $21K in 2010, according to some recent data released by the New York Federal Reserve Bank. And the average amount owed increased even faster than tuition costs. Here’s how much borrowers owe, based on their income level.

$10,000 per year: Low end of average student loan debt

If you’re looking for low-interest rate student loans, you won’t be able to find them under current federal guidelines. But if you’re willing to take out private loans, they may still be affordable. According to Fiserv, a credit bureau, the lowest-cost loan currently offered is $7,500 over 10 years. In addition to making sure you qualify for the loan, here are some things you need to know before you apply.

Average Rate On Student Loans

Student loans have become almost synonymous with higher education. But the average rate on these types of loans has risen considerably over the past decade, according to data from the National Bureau of Economic Research (NBER). In 2005, the national rate was 5.15 percent — and today it’s 6.21 percent. That’s about $1,300 per year for someone who borrows $40,000.

The increase comes at a time when college costs continue to rise faster than incomes, making student debt even harder to pay off. According to data collected by the NBER, between 1980 and 2010, annual tuition grew at nearly twice the rate of inflation — from $1,890 to $9,873. At the same time, median household income increased just 1.7 percent, from $54,054 to $56,095.

While the average interest rates on most loans vary widely based on factors including credit history and type of loan, some borrowers say they feel trapped by their high monthly payments. “Student loans make me want to die,” said Andrew, a 26-year-old graduate student from New York. He asked to use only his first name and describes how he struggles to cover his bills each month while paying back roughly $400 in principal and interest.

But paying down those balances can take years if not decades, especially since many borrowers don’t know what their options are for refinancing or consolidation until after they’ve taken out a loan. And although federal law requires lenders to offer terms and conditions that protect students from steeply rising rates, borrowers often aren’t aware of them before signing on the dotted line.

“It’s basically impossible to pay off this amount of money,” added Andrew. “I’m being held hostage.”

For Andrew and others, the problem is compounded by the fact that the average repayment period for a federal loan lasts just five years, meaning that it takes roughly 30 years to repay one full term of undergraduate study. After graduation, many graduates move right back home, further increasing the burden on their parents, whose average net income was just $26,128 last year, according to the Federal Reserve Bank of St. Louis.

Student debt now totals $1.2 trillion — more than the country’s total consumer debt load, according to a recent report from Moody’s Analytics. As a result, consumers are trying to find ways to cut corners or avoid taking out loans altogether. A survey released earlier this year by Credible showed that 28 percent of respondents plan to pursue alternative career paths to save money, while 11 percent said they might drop out entirely.

And then there’s the issue of job prospects for people with bachelor degrees, particularly with the unemployment rate hovering around 9 percent. “You’re going to have to work longer hours and be willing to take jobs you don’t really care for in order to pay off your loans,” said Peter Cappelli, director of the Center for Workforce Studies at the University of Pennsylvania in Philadelphia. “If you think about it, it’s not a great way to start a career.”

For families struggling to pay off student debt, the situation may get even worse. While the federal government provides income-based repayment plans for certain categories of borrowers, these programs require financial hardship and are only available to borrowers with less than $50,000 in outstanding debt.

Some states are looking to help borrowers refinance their federal loans rather than pay the current high interest rates. Last week, California became the largest state to pass legislation designed to give low-income residents access to mortgage refinancing. Under the bill passed in Sacramento, qualified borrowers could receive up to $10,000 in tax credits for completing a program that would allow them to lower their monthly payment.

But the average borrower still faces challenges. Among the problems, says Brian Kelly, chief executive officer of CareerBuilder.com, is that many loan providers do not disclose additional fees that can add hundreds of dollars toward the cost of servicing a loan.

“There are a lot of hidden charges and fees that you don’t understand unless you ask questions,” Kelly said.

To prevent getting into trouble, Kelly suggests avoiding automatic debits and opting instead for direct deposit so that you can monitor your account closely. Borrowers should also shop around for competitive rates and look into additional payment assistance programs offered by private companies. These services can provide lump sum payments or extra cash toward the minimum monthly payments.

As for Andrew? He continues to struggle with his balance. Despite having graduated several months ago from Fordham University, he hasn’t found any permanent employment yet. “I’m working two jobs and living on my own,” he said. “My expenses are pretty high, but I’m not sure how else to pay for school.”

Average Rate On Student Loans















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