College graduates in Georgia are graduating with high hopes, bright futures – and decades worth of student debt.
According to CollegeCalc, The average annual cost of tuition in Georgia was $10,055 a year for the 2016-2017 academic year. That’s $3,531 lower than the U.S. average and ranks Georgia as the 13th most affordable state or district to attend college.
But Georgia students are still facing their share of student loan debt.
A Georgia Credit Union Affiliates survey featuring more than 3,000 respondents across the state found about 33 percent of Georgians who went to college used student loans to help pay for their degree. Another 31 percent have children who were issued student loans.
Of those Georgians, about 6 percent say they plan to pay off those loans one to three years after graduation. About 14 percent expect to have their loans paid off between five and 10 years after graduation.
About 19 percent of respondents said they felt their loan payments were going on “forever” and wondered “if they’ll ever be paid off.”
That’s not a surprising response. Student Loan Hero estimates the average 2016 college graduate has $37,172 in student loans. All that money can take a decade or more to pay off. The Consumer Finance Protection Bureau considers a standard payment term on a student loan to be about 10 years, although borrowers with more than $30,000 in federal student debt could be eligible for payment plans up to 25 years.
A Pew Research Center survey found 16 percent of adults report having outstanding student loan debt left over from funding their own education. Of those respondents, 22 percent are between the ages of 30 and 44. Another 7 percent are ages 45 to 59.
A NerdWallet study suggested student loan debt will hamper most new grads into their 60s and 70s, contributing to a longer working life. Most won’t be ready to retire until age 75.
Overall, Americans owe more than $1.48 trillion in student loan debt, according to Student Loan Hero.
- Tips to paying off student loans:
- Start paying loans back as soon as possible. Federal lenders will wait six months after graduation to begin sending student loan bills. That grace period is meant to give recent graduates time to look for a job before they need to begin repaying. It can be tempting to wait out that full six months – even if you’ve already found a job. But unsubsidized loans continue collecting interest during that grace period. The sooner grads can begin repaying student loans, the more money they’ll save.
- Pay as often and as much as possible. As often s possible, try to pay more often than once a month and more money than your monthly payment. It’s best to put any extra money toward your student loans. But if you need more structure, consider splitting your monthly payment in half and paying roughly that amount each two weeks.
- Identify cash windfalls you can put toward your debt. Plan to put all the extra money you accrue through the year toward your student loan debt. Your tax deduction check is an easy place to start finding that extra cash. You may also want to consider bonuses, any money you’ve inherited and even those birthday checks from grandma. You’ll be surprised how much windfall cash can add up over the year!
- Keep on top of your personal budget. Windfall cash is helpful, but most people will need to use money in their budgets to pay back student loans. So, it’s important to keep a detailed personal budget to track earnings and spending habits. Budget out your monthly payments to make sure you’re not spending that money elsewhere. Then, try finding money you can trim from other areas of your budget and add that money toward your budgeted student loan payment.
- Set achievable milestones and reward yourself as you reach them. Paying off student loan debt can feel overwhelming. It’s important to keep yourself motivated! Set up a payment plan with achievable milestones throughout and reward yourself when you reach each milestone. Begin by paying off the highest-interest loan, first. When that’s paid off, celebrate with a small “splurge.” Keep yourself from feeling burnt out or deprived — then be ready to tackle the next loan.
The key to avoiding student loan debt is pre-planning, said Roy Bibb, president at MidSouth Community Federal Credit Union based in Macon.
“The best thing you can do is to prepare for college costs years ahead of time by creating as much savings as possible,” Bibb said.
But he acknowledged that’s not always possible. Most people will not have enough in savings to pay for higher education and will need to take out loans.
“That’s just a part of life, sometimes,” Bibb said.
Credit unions can provide alternative or supplemental funding to federal student loans. Bibb recommended potential talk to their credit union loan providers before taking out loans to be used for education.
“It’s great to talk to your financial provider and explain exactly what you’re going to be using the loan for,” he said. “Because then we can try to work for you. We can try to work outside the box to get you the loan you really need. So, maybe it makes sense to extend this short-term loan into a longer-term opportunity. Talk to a loan provider like us and really let us know your situation so we can package something to make it fit.”
But if a borrower has already taken on either a federal or private loan that isn’t a good fit, there are steps that can be taken. Borrowers should first investigate deferment and loan consolidation options. Credit unions can help with those services.
“Every credit union wants to work with you to help pay that loan back,” Bibb said.
Bibb also said borrowers should give their lenders an honest view into any difficulties they’re having paying back the loans. This is especially true if the loan was taken out through a credit union, where staff tend to work with members on an individual basis.
“If somebody comes to us and says, ‘Look, I’m struggling here,’ we’ll do backflips to help them out,” Bibb said. “Most people err in student loans when they don’t talk to their lender before their loans go into delinquency. Just be honest and let them know what’s happening.”