The rising cost of higher education has made it almost impossible for many families to finance a college education without taking out a loan. The interest rate students will have to pay on those loans once they graduate could severely impact their ability to repay the money down the road.
A college degree substantially increases earning capacity, but a college degree does not come with job guarantees. Many college graduates find themselves unemployed or under-employed after graduation.
On average, college graduates in the class of 2011 owed about $26,600 in education loans. For a young adult just beginning a career, that 20-year loan means a monthly installment of about $150 at today’s interest rates.
About 72 percent of student loan borrowers fall into the $26,600 category, but about 16.5 percent of those who borrow for college end up owing $50,000. They face about $450 in monthly payments. Almost 2.5 percent of borrowers end up $100,000 in debt, which will cost them about $1,075 a month for the next 20 years. We culled these figures from a variety of credible sources.