The cost of college has more than tripled over the last three decades — annual tuition and fees now total $8,893 on average at four-year public institutions.
Private four-year students pay three times as much.
And looking at a state-by-state breakdown of tuition rates, East Coast students have it the worst. In-state tuition for New Hampshire residents is the highest in the nation, topping $12,000 per year, according to an independent study by research firm Wintergreen Orchard House.
Pennsyvania isn't far behind, with annual tuition costs averaging $12,193.
If you think of education as any other consumer good — groceries, gas, cars — price hikes are to be expected. But the problem with rising costs in the U.S. is that wage growth hasn't been able to keep up. As a result, more and more people have turned to student loans to finance their college degrees.
Study after study has proven a college degree is an investment worth making. The average American student graduates with $29,400 in loans, a daunting thing to face for anyone right out of school. In states like Delaware (average student debt load: $38,834), New Hampshire ($32,267) and Rhode Island ($31,636), graduates have it worse than most.
If you're saddled with more student debt that you know how to handle, we've put together a simple guide to getting started:
How to tackle student loan debt:
Figure out what you owe: Log into the National Student Loan Data System to see all of your outstanding federal student loans in one place. If you have private loans, ask your school’s financial aid office for help tracking them down or review your credit reports at annualcreditreport.com. Because private lenders don’t always report loans to all three credit bureaus, check your credit report at all of them to be on the safe side.
Prioritize: Make a spreadsheet. Open up a Mint.com account. Do whatever it takes to organize your debt in a place you can easily keep track of them. Loans that have the highest interest rate should go at the top of your payoff list. We highly suggest tackling private loans first. Private lenders are much less likely to offer flexible repayment options, such as loan deferment and income-based repayment.
Don’t ignore your bills: If you’re fresh out of college and supporting yourself with a part-time job at Macy’s, a monthly student loan bill could be too much to handle right away. You aren’t alone. But that still isn’t an excuse to stuff those statements into a junk drawer and pretend they don’t exist. The longer you let unpaid loans linger, the worse it will be for your credit, not to mention your mental state (debt collectors are no joke). It could also adversely affect your job chances. Employers have been known to run background checks on job candidates and turn down applicants who appear to be fiscally challenged.
Know your options: If you’re overwhelmed, that’s OK. You will be better off contacting your lender (also called your loan servicer) and telling them about your situation. They may offer repayment options you didn’t realize you had. The most common paths you can take if you can’t afford your federal loan payments include: Income-based repayment; loan deferment or forbearance; and loan consolidation, all of which you can apply for (for free) at NSLDS.gov. If you have private loans that you can’t afford, ask your lenders if they offer loan consolidation. Public service workers may even qualify to have their entire loan balance forgiven after 10 years (120 consecutive loan payments).
Pay strategically: You can often qualify for an interest rate discount (from 0.25% to 0.50%) on your loans if you set up auto-payments through your lender.
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