Whether we are talking about a commencement speaker paying off the entire graduating class’ debt or we hear another politician proclaiming free college for all, I think we can all agree that college debt is an expanding crisis. Maybe you don’t feel bad for college graduates, and maybe you shouldn’t but the issue bigger than how we feel about it. When our best and brightest don’t have the means to buy a car or a home (or any big-ticket item), that negatively effects the entire economy. Candidates for national office have a plan for our student loans if we gave them our vote but I don’t have faith that any of those plans will work. Not for a lack of good intentions but because there are too many special interests embedded in the process (enormous servicers, lobbyists, and the fat cats who own the debt).
When I went to school in the 1990’s I paid for a four-year university working a full-time job at a restaurant. While I like to talk about how hard I had to work, I couldn’t do the same today because my alma mater costs 5x more than when I attended. Wages are certainly not 5x what they were in the late 90’s (at least not for the working class). The days of being able to work a job and afford to go away to school are long gone. $1.6 Trillion in college debt is the new normal; and that’s mostly being carried by the newest working generation. That amount of accumulated debt is a becoming a national crisis.
Estimates put the number at 4% of employers that are willing to work with new employees regarding their college debt burden. Even then, they usually don’t directly pay off your loans. Recently, a Fortune 500 company came out with a plan that pays towards your 401K if you allocate 2% of every paycheck to your student loan debt. I’m not criticizing them for doing something, they are doing more than just about anybody. But if that’s all there is, it illustrates that it doesn’t affect much, even with companies trying to get out in front of it. It also begs the question, what percentage of college graduates land at Fortune 500 companies right out of school?
Then there are the public loan forgiveness programs, touted for the last 12 years to get out from under your college debt burden because you worked in public service and contributed to the public good. Now those folks are being rejected in droves for technicalities after being in the program for the required 10 years.
Maybe you already know all of this and feel there is nothing that can be done. Getting control of personal debt is never easy but when you’re working and put together a budget you can do the things you can get rid of debt. Like anything, you must act if you want to get ahead of the problem. If your commemorative speaker didn’t pay off your debt and the person you voted for didn’t make college free (retroactively) and you don’t have a rich family member who will pay it off for you, what are your options?
Refinancing is a reality-based solution many graduates have taken advantage of to get control of their payments. You can lower your rate for a lower payment or lower your term and pay it off without all the interest. You can even extend the term if you want the lowest payment possible right now, with plans to pay it off once you get that next promotion. There are no costs or fees to refinance so you don’t take on more debt when you do it and if you need a co-signer, they can come off the loan with 12 on-time payments.
If you have 60 seconds, it’s worth checking out. Companies like Mission Valley College Loans works with over 300 community lenders that go to work for you. There is no credit inquiry to get pre-qualified. If you or someone you know has student loan debt and they want payment options, www.missionvalleycollegeloans.com might be the answer thy are looking for.