More than half of people surveyed by Consumer Reports said they struggled to pay their monthly student loan payment at least once, and nearly the same percentage said college isn’t worth the price tag.
The surprising findings come from a survey on college loan debt.
The survey also asked for written responses where some people wrote, “I generally feel like my soul is being crushed,” and “I have to skip meals and take money from my children.”
Student loan debt has an incredible impact on people's lives, which is why Donna Rosato, a senior editor with Consumer Reports, says students really need to think about the total cost before picking a school.
“Some people were delaying getting married, they couldn't afford to buy a house, a car, or most disturbing, had to cut back on everyday living expenses like buying groceries,” Rosato said.
Public universities average around $20,000 a year, which adds up to $80,000 over four years. Private universities can be double that amount.
Rosato said a good rule of thumb in determining whether you'll be able to pay off those loans is to think about how much you'll make when you graduate.
“Not to borrow more than you expect to earn annually in those early years of your career. The average student earns about $50,000 with a bachelor's degree when they graduate these days,” she said.
And to take less if you anticipate a lower base salary.
Even if you make $50,000 a year, a $50,000 loan over 10 years is around $500 a month.
And the loan you choose also is significant. Rosato recommends federal loans over private loans.
“Federal student loans have many more consumer protections built into them and they have more flexible repayment options,” said Rosato.
Federal loans may provide income-based repayment plans, loan forgiveness programs, and deferred payment if you decide to go back to school.
The type of federal loan also affects repayment. Unsubsidized loans accumulate interest as soon as the money is dispersed while interest for subsidized loans only starts to accumulate when the student is six months out of school.
It's also never too late to apply for financial aid, even if you're already in college. You can apply up until the end of the semester you're currently in.
For more information on the Consumer Reports survey results, click here.