Student loans becoming a financial burden for students and parents
RAPID CITY, S.D. — According to CNBC 44.7 million people have student loans. A quarter of millennials are $30,000 in student loan debt and 11% have over $100,000 student debt.
“College student loan debt is becoming the second leading debt that Americans have we have $1.6 trillion in our student loan debt right now,” said Terry Mills, the Education and Outreach Manager with Consumer Credit Counseling.
Locally, about half of the students at Black Hills State take out loans and the average each student takes out in total is between $25,000 and $30,000.
While investing in education pays off, it is important that students make wise decisions regarding the amount of debt they can take on.
“Look at the affordability of a university before you make a decision as to where you go. Public higher education is of great value and meaning you get a good education, but you pay less for it,” said Laurie Nichols, the President at BHSU.
With thousands of dollars in debt, many millennials are unable to afford homes, cars, marriage and more; without the help of their parents.
Parents of millennials are taking on rent payments, mortgages, phone bills, and even the grocery bill in order to help keep their college grad afloat.
Mills believe we are headed towards a crisis because parents are spending their retirement on their adult children and graduates are struggling to be financially accountable
“Any financial planner will tell you to always take care of your personal finances first and let your children figure out how to deal with the student loans because they’re going to have hopefully, the next 40 years to work and pay them off,” said Mills.
For many, the financial expense of education can be intimidating, but the good news is, there are solutions
“Explore any possibilities on your university campus for scholarships because all campuses give out scholarships and there may be possibilities for a student to get a scholarship which also helps bring down the cost of education,” said Nichols.
Along with scholarships and grants students can choose to go part-time and pay as they go along, or parents can help them save at a young age. As kids get older, they can save for college themselves.
“The state has a 529 plan that you can invest in that and then they can take their money back out of there,” said Mills.
Education is invaluable and there is are healthy approaches that students and parents can take towards loans and education.