The average student loan debt has almost tripled in the last 20 years. And, it doesn’t look like it will disappear anytime soon. So, let’s talk about the average student loan debt, what that means for generations going forward, and how you can avoid it.
The average student loan debt in 2020 was *drumroll please*… $37,200.
The average debt in 2000? Less than $16,000.
And that’s not even the most shocking statistic. Let’s go over a few others, shall we?
- Total U.S. student loan debt is a little bit above $1.6 trillion dollars.
- 14% of parents took out loans for their students.
- There are currently 44.7 million Americans with student loan debt.
- Only 845 PSLF (Public Service Loan Forgiveness) borrowers have been approved and granted loan forgiveness (and that’s TOTAL).
Why Is The Average Student Loan Debt So High?
Without getting too far into politics and capitalism, student loan debt is mostly high because students and young teens aren’t being taught the possible repercussions for taking out so much money in loans.
And, with most schools not having more than a basic finance course, and parents (many who never went to college themselves) not knowing how loans work, many teens are doing this all solo. Also, college, specifically ivy league or expensive private schools, is still being pushed as a must instead of an option.
The Good News
However, there is some good news in this. Generation Z (the upcoming generation), has a real fear of debt, and want to avoid it at all costs.
In fact, 1 in 5 says that they’re avoiding getting into any kind of debt (including student loans).
And over 67% of working-age Gen Zers already have jobs or side hustles to help with college costs. Many have also decided to stay home and commute, live with friends to keep costs down, or attend community college first. What a smart generation!
Luckily for Gen Z, they witnessed what happened during both the 2008 recession and the years that followed. So many are trying to set themselves up for success in case something similar happens again.
What To Do Before Getting Student Loans
Unfortunately, you can’t always avoid student loans. However, there are a few things that you can do before requesting loans.
1) Fill out the FAFSA
Will it help everyone? No. But, if you’re considered in financial need, it’s always worth applying. Even if you think you make too much to qualify (or if your parents make too much), apply anyways (here’s the FAFSA link). Anything helps.
2) Apply for scholarships
During my first round in college, I applied to over 300 scholarships. Did I receive them all? Absolutely not. But I did win over $17,000 in scholarships and I was able to cover my first two years of school, and this was ALL because of the help of scholarships.
3) Choose a cheaper school
Yes, I know, I know, ivy league schools are cool. But they’re also expensive. So start at a community college, or go to your in-state school. Even going for just two years can cut your out of pocket expenses in half.
If you need to go to an ivy league school for a specific degree or because it gives you a better chance at being in your field (like Harvard Medical), you still have a chance to do it after getting your Gen Eds out of the way. Trust me, no one is going to care where you took your Math and English courses.
4) Start young
Many high schools now offer dual-credit classes. For example, you’ll go to school as usual, but by paying a certain fee (which is usually at least a third cheaper than the actual college class), you’ll get college credit. As long as you get decent grades and pass your final, you’ll get the college credit, without paying full price.
What Do You Do If You Already Have Student Loans?
Unfortunately, not everyone got the financial information they needed before signing up for student loans. So, what do you do if you already have student loans and are looking to pay them off?
This site has many different options to help you pay off your student loans, including how to budget, how to pay off debt a little faster, and even how to refinance loans (because let’s be honest, interest rates are too darn high).
Of course, there are other ways to try to pay off student loans too, including programs that you may qualify for. Just remember to do your research and keep all your paperwork so you can apply for those programs and have a better chance at success.
The Average Student Loan Debt – Sad, But Don’t Become a Statistic!
Student loan debt won’t be disappearing anytime soon. However, there are other ways to attend college as close to debt-free as possible. And, if you currently have student loan debt, there are ways to pay it off early and enjoy life more. Don’t become a statistic! Don’t just shrug and say, “Well, everyone else has student loans…that’s just how it is…” It doesn’t have to be.
Avoid student loans if you can, and if you’ve already got them, then pay them off quickly! Here’s a free debt snowball calculator. Use it to map our your debt payoff. You absolutely won’t regret it!
Isn’t the average student loan debt in America absolutely ridiculous? In this instance (and all instances really), choose to be better than average!
AUTHOR Kimberly Studdard
Kim Studdard is a strategy consultant and course launching expert. When she isn't spending time with her daughter and husband, or crying over This Is Us, you'll find her teaching other mompreneurs how to scale their business without scaling their workload.