The Shocking Reality of America’s College Student Loan Debt

Dear College Made Simple reader,

Take a guess at how collective debt college graduates currently owe.

$500 million? $50 billion? $500 billion?

Getting warmer. All totaled, student loan debt has exceeded the $1 trillion mark.

Few of the major news outlets have reported this startling fact. But the reality is – this $1 trillion student loan debt figure breaks down to a rough average of $35,000 per college graduate.

In today’s post, we’ll review what that means, ways to get a leg up in college planning – and NOT play into the student loan debt trap.

– Scott

The Disturbing Facts about Today’s Student Loan Debt

What does $35,000 in student loan debt do to a new college graduate?

Sometimes it means living with their parents, which can seem like a financial leash to both the graduate and the parents.

For most of the graduates living on their own, they have to continue living on a college budget (or tighter) just to get by without having to take out more loans.

Basically, what a student imagines their life to be after college – being able to afford their own car, rent, paying off credit cards, traveling, “life” – is often an illusion.

The effect this has on our economy is profound. But for most families, it simply means being saddled with having to pay off college loans for decades.

And in that time frame, it makes it harder to do things like start saving for (future) children’s college education (so they don’t have to live their lives in the red).

That’s why it’s smart to know all your options, including some of the best ways to prevent yourself or your college-bound teenager from amassing a crippling, decades-long debt.

In fact, the best answer is simpler than people would expect: proper financial planning.

Specifically, that means defining and setting your overall financial planning goals. To do this, you need to know not just how much you need to save, but the best ways to save.

For example, it’s commonly assumed that 529 College Savings Plans are the best ways to save for college.

While they do offer a handful of benefits, more and more they are lacking safety, certainty and liquidity.

That’s because 529 plans are subject to the mercy of the stock market – the ups, the downs, the runs, the droughts. Most especially, the unpredictability.

Not to mention that the money in a 529 plan could possibly count against you when you go to apply for financial aid.

With each year, you don’t want to put outside forces more in control of your ability and capacity to pay for college.

For example, interest rates on Stafford loans are scheduled to double on July 1 – from 3.4% to 6.8% – unless Congress agrees on a plan to prevent it.

But the way things in Washington D.C. have been going the past 4 years, who really expects a happy ending to this nightmare scenario?

With so much at stake, more families are becoming aware of the risk of letting outside forces dictate how much debt is waiting on the other side of your or your children’s college degree.

That’s why it’s important to speak with an experienced College Funding Advisor who can provide a variety of options that fit your comfort level.

Remember, the sooner you can get to work planning for college, the sooner you can make your college savings go farther.

To Your Family’s Successful College Search,

Scott Weingold
Co-Founder, College Planning Network LLC
Publisher, CollegeMadeSimple.com – The free educational resource of College Planning Network

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Editor's Note: Scott Weingold has been ranked the #1 “College Financial Aid Expert Worth Knowing About” in the entire country by CollegeStats.org.  He has co-authored the book, “The Real Secret To Paying For College. The Insider’s Guide To Sending Your Child To College – Without Spending Your Life’s Savings.” Scott also publishes a popular free online newsletter, “College Funding Made Simple" which reveals insider’s tips, methods, and strategies for beating the high cost of college.

Scott is the co-founder and a principal of the widely renown College Planning Network, LLC – the nation’s largest and most reputable college admissions and financial aid planning firm. CPN is a proud member of the Better Business Bureau, the National Association of College Funding Advisors, the National Association for College Admission Counseling, the National Association of Student Financial Aid Administrators and the Student Affairs Administrators in Higher Education.

Scott, along with his college funding advisory team, helps thousands of families throughout the country with their college planning needs and offers a series of free educational webinars and workshops on “How To Pay For College Without Going Broke In The Process!” He's been featured or mentioned in The Philadelphia Inquirer, Yahoo News, TheStreet.com, Voice America with Ron Adams, Crains Cleveland Business, and on Cleveland Connection with James McIntyre.  Scott has published numerous articles and is a professional speaker who has addressed thousands of audiences online and offline throughout the United States.  His actionable insights and candid, open approach have earned him & his team numerous media interviews, citations, and speaking opportunities, and his free online video workshop is one of the Internet’s most widely viewed pieces in the college funding space.