As time goes by, the average student loan debt continues to rise. While students should only have to focus on their education and future, student loans are becoming a major concern for both students and their parents.
From tuition fees to books, many students are spending thousands of dollars before even they become graduates. It doesn’t end here, student loans have a significant impact on the average 21-year-old college graduate’s income. In fact, it also affects their average yearly earnings for the rest of their lives.
It’s almost impossible for an average student to get admission to good colleges in the USA or Canada without scholarships, federal student aid, or financial support of some kind. Therefore, average students can’t afford to spend thousands of dollars on tuition fees and other course materials each year. Thus, private student loans are the only solution to their problem for many.
The only problem with that is most students don’t know how much exactly they will earn after their bachelor’s degree. If students had enough knowledge about the average student loan debt, average tuition fees, and average salary after graduation, they would be able to solve this problem more easily. That’s why we are here to help.
We have gathered a bunch of information that you as a student must know. So keep on reading and get familiar with the average student loan debt!
Average student loan debt: $27,975
For average students in the USA and Canada, the average student loan debt at the time of graduation is $27,975. This average student loan debt varies from school to school and course of study.
For example, the average graduate with a law degree owes more than the average student with an engineering degree. That’s just how it goes, students in the USA and Canada owe over $27,000 at the time of graduation.
Average student loan debt per year: $9,410
It’s a well-known fact that average tuition fees for colleges and universities are more than ever before. The average student loan debt per year is $9,410. It’s not just average students in the USA and Canada who are facing this problem. Students in the UK also seem to be under a lot of pressure with average student loan debt per year that reaches up to £10,000!
Average monthly student loan payments: $775
Students who live on their own and those who live with family members have to pay $775 as monthly payments. This number seems to be normal, but what’s not normal is the average amount of interest students have to pay back after their graduation.
The average interest rate on student loans: 6.5%
The national average interest rate on student loans is 6.5%-8.50%. This percentage will depend on the public market rates and the rate the school sets.
However, even if this percentage is a lot lower than credit card interest rates and bank loan rates, it can still affect your average income after graduation. Since it takes a few years to pay off student loans, most students rely on their parents for support and financial aid.
Average college tuition fee: $30,000-$45,000
In the last 10 years, average college tuition fees have increased by 2 times. In fact, the average college tuition fee is now $30,000-$45,000 per year.
In some universities and colleges in Canada and the USA, you might even need to spend up to $50,000 a year if your study program is more demanding.
Let’s take a look at some of the most popular colleges in Canada and the USA with their average tuition fees. Most of these average college tuition fees don’t include the cost of living and other expenses that students need to pay. So these fees are only for your college education.
$52,000 – Columbia University (New York)
$51,000 – Sarah Lawrence College (NY)
$50,000 – George Washington University (Washington DC)
$49,560- New York University
$47,950 – Eugene Lang College of Liberal Arts (New York)
$44,000 – William Paterson University of New Jersey
$43,000 – Northwestern University (Illinois)
$40,520 – Georgia State University
$39,970 – Northeastern University
Other costs that students usually forget about:
Books and course materials. For example, if you’re planning to study medicine, we’re talking about hundreds of dollars per semester for books and course materials. Transportation fees and living costs. You will also need to pay for your transportation since you can’t always rely on public transportation or your parents drive you to school and college. Let’s see how much do they cost on average:
1. Living costs:
Living cost varies from one city to another. It depends on the average rent price in your city, plus other expenses that you have every month. Let’s just say it costs around $800-$1000 per month for living costs if you live alone or with a friend.
2. Transportation cost:
If you’re studying at a university or college that isn’t close to your home, you will need to pay for transportation on daily basis. An average student who drives to school might spend up to $50 per week on gas and other costs. If they are taking the bus, it’s safe to say that this amount can be higher depending on how far they need to travel.
3. Food cost:
It’s normal to go out with your friends and family for dinner, drinks or fast food. This can be very expensive if you do this every day! Let’s say it costs you $50 per week just to eat outside and socialize.
4. Books and course materials:
Most schools and colleges expect their students to have their own books and course material. The average cost of a book is approximately $200-$250 if the textbook is new. If you’re studying engineering or medicine, you’ll need other study materials such as laboratory kits, CDs, and software.
5. Other expenses:
You might need to visit the dentist or doctor for a checkup. If you need glasses, contact lenses, or other medical aids, don’t forget to add this expense too! Other expenses like going out or entertainment are also included.
Federal student loan debt vs private student loan debt
If you need to take Federal student loans or a private student loan, here’s what you should know. Federal loans have better conditions and lower interest rates than private loans. For example, the federal government sets their student loans interest rate depending on the type of study program and the year you’re in at school. On the other hand, private lenders set their own interest rates. They are usually higher than federal rates, so it’s better to avoid them.
The average federal student loan in the USA is $36,000. In Canada, this amount can be higher or lower depending on your province of residence and what study program you’re taking at a college or university. In order to reduce the loan payments, you can take a look at their plans such as the Federal Family Education Loans.
When it comes to private student loans or direct loans, the average is $14,400 for graduates with bachelor’s degrees. On the other hand, students who drop out of college or university have more than $20,000 in private student loan debt on average.
You can find information about private international student loans here:
What country is #1 in student loans?
The USA is the country with the highest student loan debt in the world, so it’s no surprise that they also have one of the highest average college tuition fees. On average you need to pay $35,000 if you study at a US university or college after high school.
In 2017, student loan debt has reached a new record in the USA. It currently amounts to $1.33 trillion which means every American owes an average of $37,172. It’s even higher than the car and credit card loans.
It’s not the tuition that’s causing the problem, but the cost of living which is very expensive in most cities. Cities like New York and Los Angeles have a very high cost of living. And the same this is happening in Canada. With high tuition fees and living costs, it won’t be surprised if we reach $100,000 in the next few years.
What would happen if you fail to pay your student loans?
If you fail to pay back your student loan, this can lead to serious problems
1. Increased interest rates:
If you default on your student loans, the federal government can increase the interest rate for their federal loans. This means that instead of paying 6% (the current interest rate), it will be 18-23%, which is very high! The interest rates could increase more if you take direct loans or personal loans from private student lenders. And if you can’t manage to find a suitable job you will find yourself in more debt.
2. You can’t pass the background check:
If you want to work for the government or join the military, you will need to pass a thorough background check. One of these is passing a credit score check. If your credit score is low, it means that you’re not reliable with money and this isn’t something you want to show on your background check.
3. Bad credit:
If you fail to pay your student loans, the federal government will send your account to a debt collection agency. If they can’t contact you or get you to pay back, this will affect your credit score and ruin it. This means that if you want to buy a house in the future, take out a loan for any other reason, or simply need a credit card, you won’t be approved because your credit score isn’t good.
If the debt collection agency fails to get in contact with you or can’t help you pay back, they will sue you for the money that you owe. If the court decides that you need to pay it back, they will take your bank account, tax refunds, and wages. This means that if you have any savings or are planning to get a big salary raise in the near future, it will be taken away from you by the courts!
Student loan debt reaches $2 trillion in 2021
We are in the last quarter of 2021. According to the student loan statistics and the federal reserve bank, the total student loan debt has reached a staggering $2 trillion. That means the average debt is $25,000 per person.
The cost of living has risen dramatically since 2007 and it’s expected to rise even further. The total number of students attending public universities has also risen to an all-time high and the cost of living is higher than ever before.
The cost of health care, food, and shelter has risen dramatically over the past few years which means that people spend much more on these items. This leaves less money for anything else like student loans.
In total, student loan debts have crossed the auto loans and private loans in the USA. And the number of people with student loans is expected to rise by about 1 million every year. The average net income of students has also fallen, which means that they have less money to spend on other things like loans and credit cards.
So what does this all mean?
The outstanding student loans will only continue to rise and it’s likely that we might reach $3 trillion in the next few years. The cost of living will continue to rise, which means that even if you don’t have student loans, life would be pretty expensive.
The average wage is already not enough to pay back your loan and it’s likely that we might reach $30,000 in the next few years. This means that if you want to continue your education and borrow an additional $30,000 for college expenses, you will have to pay back about $60,000 in the next 10 years.
Sallie Mae is a private student loan lender that can help you get the money to pay for school. And the simple answer to the question above is YES -it’s one of the largest and best regarded providers of private student loans in the U.S. and has been operating since 1973.
Sallie Mae, or Sallie Mae Bank, offers student loans of all types and sizes, giving students more options when borrowing than ever before, including to underserved groups – like DACA recipients or foreign residents who are seeking education in America and are usually ineligible for federal student loans.
In this post we’re going to cover some of the most common questions we get about Sallie Mae and private student loans in general.
What are the benefits of a Sallie Mae loan?
There are a number of benefits to a Sallie Mae student loan that set them apart from some other private loan companies.
Accessible for more applicants
With federal student loans and many private student loan lenders, eligibility criteria restrict many groups from accessing the funds they need to pay for their education at an American college or university. Sallie Mae does not exclude part-time students, international students or those with DACA status.
Loan forgiveness for death or disability
Sallie Mae will forgive, or “discharge”, the loan balance if the student is permanently disabled or dies – including in cases where it is the parents who are the borrowers and not the student themselves. Not even federal Parent PLUS loans have this benefit.
Cosigner release option
After 12 consecutive months of making your loan payments on time you can request that Sallie Mae remove your cosigner from your loan. Of the other private lenders that offer cosigner release, the majority only do so after several years of making payments on time.
Are there any drawbacks to Sallie Mae loans?
Like all private loans, there are pros and cons. Here are the lowlights of a student loan from Sallie Mae:
Fees for late or returned payments
Compared to other lenders, Sallie Mae charges a fee, or a higher fee, for making monthly payments late, or failed (returned) payments. A returned payment is when your payment “bounces” due to insufficient funds. At time of writing a fee of $20 is charged for these. For late payments the fee is 5% of the payment amount, or $25 – whichever is lower.
Credit check required
In order to see if you qualify for a student loan from Sallie Mae, you have to complete the application and they will carry out a credit check which will potentially affect your credit score. Some alternative lenders pre-qualify applicants to give them an idea of if they would qualify and what typical loan terms would apply without carrying out a full credit check.
Now that we’ve looked at the main pros and cons of Sallie Mae Bank compared to other lenders, let’s take a closer look at what kinds of loan are available and more detail on Sallie Mae as a loan servicer.
Student loan options
Sallie Mae offers the following types of student loan:
Undergraduate student loan
Sallie May undergraduate student loans allow dependent students to borrow additional funds over and above the maximum amount they can borrow with a federal student loan. You can borrow between $1,000 and the total cost of attendance over 5, 10 or 15 years without origination fees and without prepayment penalties.
Professional training loans
Whether it’s culinary training or another type of technical or trade school, Sallie Mae’s Career Training Smart Option Student Loan allows students to borrow from $1,000 up to the total cost of attendance over 5, 10 or 15 years.
Loans for graduate programs
If you’re studying for a master’s degree, Sallie Mae offers graduate school loans that have no origination fees. The repayment term for the graduate loan is 15 years and includes a 6-month grace period after graduation.
If you’re attending business school, and studying for your master’s in business administration you can apply for a loan to cover all of your school-certified expenses. There is a 6-month grace period on this loan and you can defer payments for up to 48 months while you take on an internship.
Sallie Mae also offers student loans for those enrolled in Dental, Medical or Law school.
You must meet the following requirements in order to qualify:
- Be 18 or over in most states
- Be a U.S. citizen or permanent resident. If you are a DACA student or foreign resident and you have a U.S. citizen cosigner you may be eligible.
- You or your cosigner must demonstrate sufficient income to repay the loan.
- You or your cosigner must undergo a credit check.
There are a number of repayment plan types.
With deferred repayment no payments are required until after graduation and the end of any grace period.
On a fixed repayment plan a fixed amount is paid every month until graduation (or the end of any grace period) and then the borrower begins to repay the principal and interest.
With an interest repayment plan the borrower makes payments against the interest accruing on the loan during school and then begins to pay off the interest and principal after graduation / grace period.
Do you need a cosigner?
International and DACA students do require a cosigner but U.S. students do not.
Don’t forget to search and apply for other types of financial aid like scholarships and tuition waivers before relying on a loan.
Funds from private loans, like federal loans, are usually disbursed directly to your school to cover tuition and other expenses paid directly to the school before any remaining funds can be sent to your own bank account.
If you would like to apply for a student loan first check your eligibility. You will be shown any lenders that have a suitable program for you and be able to compare their terms and interest rates.