What Age Do Americans Pay Off Student Loans?
We look at what age the average American pays off their student loans.
For the majority of Americans with a college degree, student debt is a huge part of graduating and going to University. Researchers show that around 70% of all college graduates leave their respective universities with student debt. These statistics mean that 44 million American citizens are holding over $1.4 Trillion dollars worth of debt between the population. So what Age Do Americans Pay Off Student Loans entirely?
When it comes to federal loans, students are required to repay their debt back within 10 years or less. Despite the 10 year payment plan, it often takes around 20 years for citizens to pay back their student finance debt.
The Citizens Financial Group have released information to show that student loan borrowers expect to pay their debt off by age 40. State level reports backup this data and support the fact that loan-repayment age is increasing. A series of Wisconsin universities have divulged that it takes 19.7 years for students to pay off a bachelor’s degree and 23 years for a graduate degree.
A multitude of loan researchers suggest that the housing market will be effected by the rate at which student loans are being paid back at. Although, it doesn’t end there.. the age of retirement for Americans is also expected to increase due to the lack of financial stability due to student loan repayment.
The Washington D.C Federal Reserve Board now have information supporting claims of home ownership decreasing. With studies being carried out to predict the age of retirement, the predicted age of retirement for graduates in 2017 is 75.
That’s right, the expected age of retirement for 2017 graduates is 75. This is due to the increase in student debt burdens.
Fortunately enough, there are other repayment methods for student loans. One being the Extended Repayment Plan, which allows students to pay back their debt in 25 years (other than 10). This allows students to pay back their loans in a fixed or gradual instalments.
With this being in mind, it is almost imperative for students to research how long their student loan will take them to repay. Otherwise it will become increasingly hard to pay back student loans and therefore increasing the retirement age beyond predictions.
Also check out how you can travel for free using student loan benefits.