Let's assume you owe $30,000, and your blended average interest rate is 6%. If you pay $333 a month, you'll be done in 10 years. But you can do better than that. According to our student loan calculator, you'd need to pay $913 per month to put those loans out of your life in three years.
You're not alone if you are still paying off your student loans from your college education years ago. In fact, many Americans are paying their student loans well into middle age. A 2019 study from New York Life found that the average age when people finally pay off their student loans for good is 45.
A $30,000 private student loan can cost approximately $159.51 per month to $737.38 per month, depending on your interest rate and the term you choose. But, you may be able to cut your cost by comparing your options, improving your credit score or getting a cosigner.
The monthly payment on a $70,000 student loan ranges from $742 to $6,285, depending on the APR and how long the loan lasts. For example, if you take out a $70,000 student loan and pay it back in 10 years at an APR of 5%, your monthly payment will be $742.
Student Debt in Perspective
Among those who borrow, the average debt at graduation is $27,100 — or $6,775 for each year of a four-year degree at a public university. Among all public university graduates, including those who didn't borrow, the average debt at graduation is $16,300.
While student loans tend to have lower interest rates than other common forms of debt, such as credit cards, you can save money on interest by paying off your loans sooner. If student loan debt is the only type of debt you have or the highest-interest debt you have, it may make sense to pay your loans off early.
Here's the average debt balances by age group: Gen Z (ages 18 to 23): $9,593. Millennials (ages 24 to 39): $78,396. Gen X (ages 40 to 55): $135,841.
On average, it takes about 10–20 years to pay off a student loan. But with the right strategy, you can pay off your loans way faster! (I'm about to blow your mind.) Exactly how long it will take you to pay off your student loans depends on your original loan balance, your repayment plan and how much you pay each month.
How student loans affect your credit score. Student loans are a type of installment loan, similar to a car loan, personal loan, or mortgage. They are part of your credit report, and can impact your payment history, length of your credit history and credit mix. Paying on time could help your score.
The average student loan payment is between $200 and $299, according to the most recent available data from the Federal Reserve.
Overall, only 1% of all U.S. adults owed at least $100,000. Young college graduates with student loans are more likely than those without this kind of debt to say they struggle financially.
Your interest charges will be added to the amount you owe, causing your loan to grow over time. This can occur if you are in a deferment for an unsubsidized loan or if you have an income-based repayment (IBR) plan and your payments are not large enough to cover the monthly accruing interest.
Because you have to make 120 qualifying monthly payments, it will take at least 10 years before you can qualify for PSLF.
The Standard Route is what credit companies and lenders recommend. If this is the graduate's choice, he or she will be debt free around the age of 58. It will take a total of 36 years to complete. It's a whole lot of time but it's the standard for a lot of people.
The Gen X debt situation
The cohort also has the largest share of people with debt, nearly 99% carry some type of balance, LendingTree found. Gen Xers led the way in three of the four categories analyzed. The group — between 44 and 59 years old — has the highest median credit card, auto loan and student loan balances.
Running up $50,000 in credit card debt is not impossible. About two million Americans do it every year. Paying off that bill?
20% of U.S. adults report having paid off student loan debt. The 5-year annual average student loan debt growth rate is 15%. The average student loan debt growth rate outpaces rising tuition costs by 166.9%. In a single year, 31.5% of undergraduate students accepted federal loans.
Although there is no strict definition for high-interest debt, many experts classify it as anything above the average interest rates for mortgages and student loans. These typically range between 2% and 7%, meaning that interest rates of 8% and above are considered high.
What is considered a lot of student loan debt? A lot of student loan debt is more than you can afford to repay after graduation. For many, this means having more than $70,000 – $100,000 in total student debt.
The 10% Rule
Let's say, for example, that your monthly take-home pay is $3,500. Your student loan payment would need to be no higher than $350 to meet this guideline. If you owed $30,000 at a 6% rate, your payments would be $333 on a standard 10-year plan, which would fall within this limit.
On average, people with student loans have spent just over 21 years paying back their loans. Federal student loans offer repayment plans that last from 10 to 30 years. Private student loan repayment terms vary.