Student Loans by the Numbers

I think we can all agree that a college education can be expensive. In fact, in many cases a four year degree can easily run upwards of six figures. You may have recalled one of my posts last week that talked about saving for your child’s college education versus saving for retirement. This generation is in a unique position of having to not only focus on saving for retirement, but trying to balance the inevitable college expenses and possibly even helping to support aging parents.

That is a lot of financial responsibility falling on our shoulders. Luckily, when it comes to financing a college education there are a lot of options out there. Here’s an interesting graphic that was passed along to me that illustrates the true cost of college and student loans. It’s some easy reading for a Friday. Do the numbers surprise you?

student-loan-numbers

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Filed Under: Personal Finance

About the Author: Jeremy Vohwinkle is a Chartered Retirement Planning Counselor® and spent a few years working as a financial planner. Today, he helps people make the most of their money by writing about personal finance here and elsewhere on the web. Jeremy is also Coach at Adaptu and a regular contributor for other publications such as Intuit, and American Express. Be sure to follow Jeremy on Twitter or Google+.

15 comments
Matthew
Matthew

I have been researching the whole student loan problem to learn more about my girlfriends issues. I remember being in debt for 22K student loans, 7K credit card bills and 4K on my truck. I was stuck mentally and physically! Luckly, I paid it all off by living at home and living low. I feel for all the folks out there with out of control debt. My girlfriend is $190K in the hole, without a traditional degree like nursing or MD. She actually has a few degrees because she believed that a few degrees makes one more marketable and increases one's "earning potential." E.P., that is the big word in her life! At least a MD has a chance at paying off 150-200K. Not as high of a chance as one might believe because there are taxes on any salary (the more you make, the higher tax bracket,) interest on the loans, and an MD must have a "nice" home and "nice" clothes and of corse a "nice" car. When was the last time anyone saw a MD driving around in a $1000 or even a $8000 used car? Add a "nice" car like a Lexus or big SUV to the mix. That's another 40K. I know happy hippies who can live off 40K for many years.
Lot's of people with debt meet partners with debt for various reasons. Combine debt and suddenly couples start off 100K, 200K, and 300K in debt! All this comes with a price! Yes, there are many successful MD's out there who live the dream. Lot's of hard work, some luck, support, and smarts! Not everyone has each and every one of those for whatever reason. Life is not a cake walk. I know that 1st hand an does everyone else in this world who is mature.
How does a person with a history degree pay off 80K? It's crazy! It's not like paying off 80K...probably 160K or more after interest on 15 years.
People say that they should have stayed out of college. Well what's wrong with working a low paying job your whole life, and not having to find a "high" paying job just to payoff debt? Oh, look at him, he's has a masters degree! Such a young professional! Darn, I'd rather pump gas than to be a young/old professional in the hole even with the flashy salary and flashy well educated, well spoken crowd who probably says every curse work in the book behind closed doors.
I got drunk with a guy who has a masters in education. I expressed interest in becoming a teacher and he warned me about the job (basically babysitting a bunch of hoodlems so their parents can work) and about taking any loans out! He will be paying off his loan for the rest of his life! He owes 1/3 what my girlfriend owes! Too darn bad! He's Such a cool guy too!
My advice: Try to picture what your life will look like-your real life, independent of what the college loan officers tell you, independent of what advisors tell you, independent of what TV tells you, and independent of what your well educated friends tell you. Ask your well educated friends how they have done it. Many people have been successful with college education. Ask them about their debt including their home mortgages. Add a home to the mix and these friends may not be as well off as you may think. For real! Most of these people will never own their homes, though they call it "My House." The banks own "their" homes. Remember, you want "real" life stories from real people.
Making a decision to take out student loans is for mature individuals. That comes with time and experience, something that is obtained by living and learning. Not everyone should go to college at 18 or even at 25 years old. Take your time. You don't need to do anything right now!

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pays to live green

Interesting graphic. I was able to save tons of money by staying home for most of college and going to a local public college. I'm lucky to have a top notch university really close to my parents house, but I took complete advantage of it.

Credit Card Chaser
Credit Card Chaser

Great looking graphics! I was expecting to see a chart or just some bullet points with stats mixed into the text on the page but you did a nice job illustrating how all of the numbers flow together - well done!

Beth
Beth

Whoa. I'm glad I didn't have to deal with the U.S. education system.

I think Phil has a point, but it is possible to to do both. Some universities in Canada have co-op programs where students alternate work in their field with study. The pay is good, but the work experience and connections are invaluable.

Phil
Phil

Its pretty clear to me that a college education is pretty much worthless these days. I would be more likely (and have) hire a 20 year-old kid who knows how to work hard than some 23 year-old English major. For instance, I hired the kid who was my paperboy to mow my lawn while he was in high school. He did such a great job, I hired him in my business and simply trained him. I knew he was smart, I knew he would work hard, and his previous work was his reference. I didn't need some professor's comments or recommendations.

Mack jackson
Mack jackson

Great post, ya i totally agree that higher education is very costly.

Lorraine
Lorraine

Wow, horrifying. In Australia we have a scheme called HECS. Higher Education "something" scheme. Anyone ( non means tested) is able to get a interest free loan from the goverment for tuition. It is paid back when your income reaches $40,000 PA, and is taken as an extra tax , at about 6-8% scaled to your income. If you never reach that income level or your income drops below that level you dont pay - ever. Most grad leave uni with a debt of $20,000(nursing)- 90,000( medicine). There is also significant discounts for paying up front. living cost are funded by the student.your system needs a complete overhaul,or you will see a greater divide between rich and poor.

Bobby
Bobby

Thanks for some truly horrifying figures. My grubs have to get scholarships, that's all there is to it.

mote
mote

Did anyone notice that 'Scholarships' is spelled wrong on this infographic?

In the Money
In the Money

Wow. That really does a good job of showing just how expensive higher education can be! But the message is true, you most likely will make more money over your lifetime.

David@DINKS Finance
David@DINKS Finance

Well, good thing I'm about to graduate college with....about 80k in loan debt!

Should've gone to a public university...

Honey
Honey

This looks about right. My boyfriend and I both either paid off or didn't have any undergraduate or consumer debt prior to graduate school.

I got an MA and a PhD and after 8 years, graduated with about $100K in student loan and about $20K in credit card debt.

He got a JD and after 3 years, graduated with a little over $100K in student loan and about $60K in credit card debt.

We now have a combined income of $132,000 and spend $976 per month on a two-bedroom, 1000-square foot apartment. We downsized after realizing we couldn't afford our previous (3br/2ba/2000 sq ft/$1400 mo.) place (well, I always realized that, but it's the place my boyfriend was renting alone before I moved in with him, and it took almost a year to convince him to move).

Approximately 50% of our net income goes toward debt repayment. We are not having kids simply because we don't want them, and do not plan to buy a home unless we can do so without financing a penny of it, but if we were on the "typical life track" we'd be in big trouble, as we both just turned 30 and would be wanting kids about now. As it is, we are delaying our wedding until 2012 because that's how long it's going to take us to get to a place where it's financially feasible.

Ellen
Ellen

Wow. Looking at those numbers makes you just want to stay out of college...

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