- Although the economy has recovered since the Great Recession, young workers are still hampered by soaring student debt.
- Student loan debt is growing at a much faster rate than auto loan and credit card debt.
- If you follow the right strategies, you can pay off your student loans in months.
Although the U.S. might be undergoing a long sustained period of economic expansion, the prosperity isn’t necessarily trickling down to up-and-coming generations — including college-age students.
According to Bloomberg, federal student loans are the sole consumer debt area with unbroken growth since the Great Recession. With costs of tuition and borrowing constantly rising, the net result is a default crisis that’s growing bigger and even has Federal Reserve Chairman Jerome Powell calling it a cause for concern.
According to the Federal Reserve, student loans totaled $1.53 trillion at the end of 2018’s second quarter. That makes the average student loan debt about $32,731 per person as of May 2017. This statistic is for the U.S. overall — in some states the crisis is even worse.
Student Loan Debt Rose by 157% in Just 11 Years
Just how bad is this student loan crisis? According to a Bloomberg Global Data analysis of federal and private loans, student loan totals have increased nearly 157 percent over the last 11 years; that means it has doubled and then some. Meanwhile, auto loan debt rose 52 percent and credit card debt dropped by about 1 percent.
Worse, student loan debt currently has the highest delinquency rate of all household debt, where repayment is 90 or more days late. In fact, more than 10 percent of all loans are at least 90 days delinquent. Mortgages and auto loans, on the other hand, have 1.1 percent and 4 percent delinquency rates, respectively, according to Bloomberg Global Data.
How to Pay Off Student Loan Debt Fast
If the problem of growing student loan debt is tough to address on an individual level, the issue of repaying it is easier to tackle. If you’re holding student loan debt, your first step in paying it off is to calculate exactly how much you owe. Whether they’re federal or private student loans, find out all the details, like each loan’s balance, its interest rate and the minimum payment required. From there, you can really tackle your student loan problem with options like refinancing or consolidating your debt.
That’s the key takeaway regarding student loan debt: You can repay it in a practical, realistic fashion, but it requires smart strategies. Simple tactical measures can make a huge difference. For example:
- Set up automatic payments on all loans. This will help prevent you from forgetting a payment, which would cause your credit score to drop.
- Schedule two half-payments per month on days that coincide with your paydays. This method will spread out the monthly hit and ensure you have the funds to pay.
Though these repayment strategies might seem boring, they’re some of your best, most practical options.
More on Student Loans
- 20 Companies That Help Employees Pay Off Student Loans
- Federal Student Loans vs. Private Student Loans: Pros and Cons
- Student Loan Providers Comparison: How Servicers Stack Up
- Watch: 3 Things I Wish I Knew About Money in My College Years
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This article originally appeared on GOBankingRates.com: Student Loan Debt Has More Than Doubled in a Decade — Pay Yours Off, Fast