$1.56 trillion. That’s the amount of student debt that Americans owe. That’s certainly no small number, and neither is the burden on Americans’ shoulders when it comes to paying it off.
With one in four Americans facing the massive weight of student loan debt, Americans are being forced to put off things like marriage and children, to a much later point in their lives. Things like having a wedding or having children have become a steep dream to live out, especially with a pile of debt that’s accruing interest sits on your shoulders. And these debts tend to come full force as payments are expected to be made just six months after you’ve been handed your diploma.
Let’s be real - just reading that can be overwhelming, not to mention actually living it!
A Harris Poll released in July 2019 found that the student loan crisis is the leading “financial taboo” among Americans today. The study also revealed that Americans were not in favor of discussing their student loan debt with their spouses.
Spouses and families might be trying to suppress the discussion of student loan debt within their homes, but American leaders are certainly not shying away from the subject.
simplify the current student loan repayment process
and debt relief for those taking out a loan for undergraduate studies would become a priority.
Also moving toward 2020, America has been getting early glimpses of what the 2020 Presidential election may include. Democratic candidates have certainly not strayed away from the discussion of student loans either.
In recent debates, Democratic candidate Elizabeth Warren proposed a rigorous change in how America currently handles student debt. Her plan includes eliminating tuition and fees for specific programs and investing money in Pell Grants.
Senator Bernie Sanders included in his plan that students who come from families with a household income of under $25,000 would have every part of their college costs covered by the government. Sanders included other pieces to what he claims is a “revolutionary proposal,” predicted to cost in total around $2.2 trillion.
But you don't have to wait until President Trump’s 2020 Budget plan or the 2020 election to change your scenario with student loan debt. In fact, you can do something right now. Here's how:
Remember putting money away for your future is just as important as paying for your children’s. With that, take steps towards planning and preparing for your retirement so you can avoid becoming a financial burden to your children, later on in life.
If you feel like you have your retirement planning under control, you can start saving for your child’s education by starting early. That said, we recommend setting up a 529 plan or ESA plan for your children. But before you do, do your research and know all the ins & outs of what they include so you can determine what's best for you and your child.
There are also other flexible options when it comes to saving, as well — cash-value life insurance, for example. Not only can you secure protection for yourself, but if needed, you can use the cash value for college tuition. What's great about this approach is that, unlike 529 plans, if your child receives a scholarship or decides not to attend college, your tax-preferred dollars can be used towards your retirement. 529 plans, on the other hand, are taxed if not used for higher education.
Also, keep in mind that 529 plans have to go on the FAFSA form, which could reduce the amount of money your student can borrow for school. Regardless of which path you choose, know your options and think of the flexibility when making a decision.
Make a Plan For Your Payments:
If you have student loans, make a plan!
Take some time to sit down and look at your financial situation. Is there a way that you could make extra money? Side gigs are all the rage today and a great way to simultaneously have a creative outlet and pocket some extra cash to chip away at student loan payments.
Be sure to also set reminders for when your payments to prevent late fees. A recent report states that 95.6 percent of U.S. households were on time with their debt payments.
Don’t Be Afraid to Talk About It:
Finding a financial adviser that you can trust and who will genuinely listen to you and your financial concerns. They will help you figure out the best way to repay your student loans, as well as handle other aspects of your money that you’d like to address. It's been reported that the average payment per month for student loan debt is nearly $400. An adviser with your best interests at heart can help you feel confident. This especially holds true as you create a plan to pay off your student loans while making payments on your daily and monthly necessities.
Philadelphia native and Penn State alumna, Kate Hynson, always had a flair for marketing. During her college years, Kate took on several brand ambassador roles and even a President role for the Penn State CHAARG chapter, which held over 275 members. Her ability to command a room and deliver a clear message aligned perfectly with the myWorth mission as we aim to provide clear financial guidance to women on a mission. Through myWorth, Kate has been able to help women feel empowered by fearlessly owning their finances.