Nearly half (48%) Student Loans Borrowers expect future debt relief.
Many borrowers expect the government to forgive their education loans, according to Sallie Mae’s annual report How to Pay for College in the U.S. Report.
(From April 8 to May 14, the global market research company Ipsos conducted online interviews with 1,000 undergraduates and 1,000 parents of undergraduates.)
Although there are ample opportunity for reliefconsumer advocates warn households against making borrowing decisions based on the assumption that the debt will not need to be repaid.
So far, tens of millions of student loan borrowers have Last summer, the Supreme Court struck down President Joe Biden’s plan to forgive up to $20,000 in student debt per borrower.
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this The upcoming presidential election also puts existing student loan forgiveness programs at risk.
As President, Donald Trump Calls to eliminate existing U.S. Department of Education loan forgiveness programs, including the popular public service loan forgiveness The initiative benefits public officials such as members of the U.S. Armed Forces, first responders, public defenders, prosecutors and teachers. Trump also wants to cut the department’s budget, as well as his administration’s stop a regulation Designed to provide loan forgiveness to those defrauded by schools.
A spokesman for the Trump campaign did not immediately respond to a request for comment.
Meanwhile, the Biden administration has launched a new affordable repayment program that could speed up forgiveness for many borrowers, known as SAVE, Currently on hold due to a series of legal challenges.
The bottom line: Financial experts warn that relying on loan forgiveness could backfire.
“Taking out loans for college makes sense for some families, but it’s critical to have a plan and do so responsibly,” Sallie Mae Vice President Rick Castellano said in a statement.
Tips to avoid over-borrowing
as Share of student loan borrowers with six-figure balances rises sharplyFinancial experts advise households to be cautious about borrowing money.
Over-borrowing can have a range of financial and psychological consequences.
Nearly 80% of borrowers with student debt between $130,000 and $139,000 report feeling “high” or “very high” debt stress, compared with only 1% of borrowers with balances under $10,000. Around 25%.
“If you borrow too much, you have less money available for other priorities. For example, buying a house,” Kantrowitz previously told CNBC.
“You may also have to accept a higher-paying job instead of Jobs that match your career goals,“He added.
A general rule of thumb is not to borrow more than your expected starting salary, said Betsy Mayotte, the bank’s president. Association of Student Loan Counselorsa non-profit organization.
This number will vary depending on the major a student chooses. You can check the annual Average income by occupation On the U.S. Department of Labor’s website.
Kantrowitz recommends that families consider college based on “net price,” i.e. the amount they need to pay Use savings, income and loans to pay bills after aid does not need to be repaid, including Grants and Scholarships.
Kantrowitz said when calculating the net cost of attending school for four years, it’s important to remember that the cost can vary from year to year because some colleges offer assistance Applies to first or second year only.
So, after estimating the total cost and taking into account any funds you plan to use for your college bills, you’ll know whether the money you need to borrow is reasonable.
