Student Loans in the News: Paying Off Your Loans
A brief round-up of recent articles and blog posts that discuss current student loan debates and data
About the author: Kevin Mahoney, CFP® is a fee-only financial advisor in Washington, D.C. Kevin's work with his peers focuses on paying off student loans, buying a house, investing savings, and budgeting. Kevin is the founder & CEO of Illumint, a virtual financial planning firm specifically designed to help couples and young families with their financial decisions.
Want to Pay Off Your (Crushing) Student Loan Debt in 2020? Here are 5 Smart Ways to Do So
Author Melanie Curtin writes:
"Debt isn't just a financial issue; it's a health issue. According to the Mayo Clinic, people in dept have higher rates of anxiety and depression, which lead to things like headaches, weight gain, digestive problems and other physical problems (like IBS).
Another study found that young adults with debt have elevated blood pressure rates, which can lead to heart attacks and strokes. And a scientific review of 65 studies found that the likelihood of having a mental health problem is three times higher for those who have debt. These problems include problem drinking, drug dependence, depression, psychotic disorders ... and suicide.
In other words, debt can make you feel sick. It can make you feel worthless. It can make you want to kill yourself.
I'm not saying this to say the situation is hopeless. I'm saying it to let you know that if you're in this position, it's "normal" that it eats you alive sometimes. I know what it's like to fall asleep thinking about your credit-to-debt ratio and wake up feeling overwhelmed about how you're ever going to get ahead."
[Read the entire article over at Inc.]
6 mistakes I made while paying off $81,000 of student-loan debt
Author Melanie Lockert writes:
"Even though I took out $81,000 in student loans, I'm actually pretty debt-averse. Owing money or anything to anyone makes me anxious. So for a long time, I didn't have a credit card; I didn't get my first until I was 28.
I knew that student-loan payments had helped me establish a credit score. But I didn't realize that there were different types of credit and that getting a credit card could help. For example, student loans are installment loans, while credit cards are considered revolving credit.
When I got my first credit card, my credit score went up. Also, a funny thing happened when I paid off my student loans: My credit score went down a bit — not a ton, but by 20 points or so. I was perplexed, but because the account was now closed it affected my credit score. Not really understanding how credit or borrowing worked didn't help me."
[Read the entire article over at Business Insider]
Student debt increased by 107% this decade, Federal Reserve data shows
Author Abigail Hess writes:
"Today, some 44 million Americans collectively hold nearly $1.6 trillion in student debt. Given that there are approximately 242 million Americans over the age of 18, that means that roughly 18% of American adults are paying off student loans.
These rates are even higher among young people. According to the Federal Reserve, over half of young adults who went to college in 2018 took on debt.
At the end of 2009, Americans held roughly $772 billion in student loans. By the end of 2019, that total had spiked to nearly $1.6 trillion — that’s an increase of roughly 107%."
[Read the entire post at CNBC]