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Over half of the 20 million people who start college each year must take out loans to help cover the ongoing costs of higher education. While this means all new graduates with loans are likely to start their adult working lives struggling financially, the greatest impact is on the students who were statistically disadvantaged before they even stepped foot inside a college.

People who might find themselves struggling more with paying back high tuition costs include students from poor families, minority college students, female college students and students who are their families’ first generation to attend college.

Quite obviously, the majority of students with debt are from families who are unable to help pay their way. The average amount of debt for a student in the USA is nearly $30,000 after graduation. Students from poorer families who will not be able to help support them, coupled with the increasing lack of appropriate job opportunities after graduation means that poor students are going to be battling to repay their loan. This alone may mean the difference between choosing to go to college or not.

Minority students are more likely to take out loans compared to their peers and it is proven that as a minority, you will have less employment opportunities. Their ability to pay back the loan is clearly inhibited by these conditions. Also, out of all minority students who dropped out of College, most indicated that financial burden was the significant reason why.

Women are also affected in this way, while the costs of tuition are the same for women and men, gender wage differences are a very real occurrence in employment, with women earning as much as 23 percent less than men in the same job. Women earning less income directly affects how much they can put back into paying off their student loan.

Students who are the first in their families to attended college quickly find themselves in uncharted waters, without older family members to guide them through the processes and advise them on loans and financing. They may make financial decisions that are not to their best advantage, such as taking out private loans, not researching or knowing how to apply for grants and scholarships, or finding out the best accommodation or tuition options.

The USA’s student debt total has increased to over one trillion dollars and a large chunk of this debt is attributed to people who are statistically proven to earn less, and are less able to pay back their loan. It is time to start looking at how we can halt this piling on effect, and give the best start to students who have worked hard and earned their degree.

Many people start off applying for college and financial aid at the same time. However, they are unaware that the financial aid process should start years before they even select a college. Here is some helpful information regarding college costs and planning for it.

Determining the Total Cost

Determining How Much College Debt You Can AffordThe US Department of Education estimates that the cost to   attend a public college is between $15,100 and $32,900. Starting early to prepare covering college costs means you need to know how much you are looking to pay out of pocket in school and what you will look at paying once you are out of school. Loans are the amount of money that will need to be paid back and scholarships and grants generally do not need to be paid back. There are exceptions such as if a rule is broken, you may forfeit additional funds or may be required to pay them back.

The best way to get an accurate figure of how much your college costs will be is to get the information either directly from the school or from a reputable website. Their College ROI Rankings resource has so much information loaded about educational statistics. You can go to this site and search for schools and get the information you need to help you form an educated decision. Make sure you are looking for the total expenses. This includes tuition, fees, and living arrangements, both on and off campus.

Find All Financial Support

A good place to start calculating how much aid you need assistance with is the Federal Student Aid Department (FSA). They have many tools and calculators. You will initially complete your Federal Application For Student Aid (FAFSA) application, which in the end gives you the estimated amount you are eligible for in student loans and the Federal Pell grant. This is also your application to qualify you for many other grants and scholarships.Find All Financial Support

A key tool to use of the FSA is the FAFSA4caster, which provides you a college worksheet guiding you to understand you eligibility and how much you need to save. You can also use the College Navigator to get information about the average amount of student loans, Pell grant, other federal grants, and institutional scholarships that are awarded.

Once you have figured out your need, you need to determine how you are going to cover your balance. Keep in mind, most of these calculations are determined based on you taking the federal loans. If you are not interested in any loans, you do have some work cut out for you, unless you are working and can dedicate income payments for your tuition as you go.


Is education worth the priceWith the cost of college rising every year, students are faced with the dilemma of choosing quality education and obtaining a lifetime of debt. Students are starting to question if a college degree is really worth the cost of paying for that degree over their entire adulthood.

Another important factor in the discussion about the affordability of education is that the unemployment is so high in today’s economy-that many college graduates cannot get a job. It’s much harder to pay back student loan debt, when one has no income to do so. Many college graduates are forced to work part time jobs, which barely cover living expenses, much less student loan payments.

But there is still much research that indicates that there is a definite gap between college and high school graduate earning levels. College graduates make about $17,000 more than those with only a high school degree. There are not as many high paying jobs available in today’s workforce, which do not require a college degree. High school graduates are left with service, retail and blue-collar jobs that usually do not pay as much as business, healthcare, law or education jobs of college graduates.

Most high school graduates will simply not have as many opportunities to make a high salary with the jobs that are available to them. Even working as an executive assistant or secretary can require a college degree in today’s economy. It’s clear that obtaining a college degree increases one chances of becoming a higher income earner and finding a career that will bring about future advancement and raises.

Young adults also have the option of attending trade schools or earning a two year degree. These options may be cheaper for students who have chosen career field or whom cannot afford a four year degree. Students will have significantly less debt, but often can make a higher income than high school graduates with no further education.


College is expensive, and more expensive still if you choose a specialized career in medicine or law. A typical bachelor’s degree runs students up with approximately $20,000 in student debt, and a medicine or law degree leaves them with an average of $100,000 in loans.  Unfortunately, for many students, the only way to get sufficient funding for the complete cost of education is to use multiple private student loans. This is because:

  • The income and family earnings of a student are too high for one private lender to cover the total amount needed for tuition.
  • The student’s credit at the time of the loan application is not high enough for the lender to issue the complete loan amount.
  • Students aren’t sure in advance how much their total education will cost them due to tuition hikes or a lack of advanced planning.

While many students find themselves stuck with multiple, private student loans, this is not the ideal situation. Carrying a single private student loan is fine, but there are a number of reasons why this structure gets students in trouble once the loans start accumulating interest, and fall into the repayment period.

Cons of Using Multiple, Private Student Loans for Tuition

Taking out multiple student loans may be the only way that students get the funds required for their education. However, these loans do come due and when this happens there are a number of cons:

  • Monthly minimum payment amounts are higher – compared to one loan that covers the total tuition amount loaned, having multiple loans with varying interest rates means that the minimum payment amount is higher, which can affect the budget of new graduates.
  • More interest is accumulated – Interest incurs on each of these loans individually on a variable basis when a graduate has more than one private loan. Overtime, having multiple student loans will cost borrowers more.

Fortunately, there are college debt solution options for students that can help them financially.  

Consolidation Student Loans

Credit Unions are beginning to back loans that help students in consolidating their debt. This is important for those looking for a college debt solution as they are struggling with their finances. The typical process with these student debt consolidation loans is as follows:

  • Students must apply for the loan – the government does not back these loans. As a result, to obtain a student loan, a credit check must be completed to determine that borrowers have good financial standing for a student consolidation loan.
  • The lender will pay off the old student loans and issue a new loan – the new lender will pay off all existing student loans and provide one new loan for the total amount.  This will then lower the interest, and the monthly minimum payment amount for the borrower.
  • The borrower may be able to pay the loan off faster with no prepayment penalty – if budget allows the borrower to pay a larger amount monthly to cover the loans, then they may be able to pay off more than the minimum amount required with the new loan. This gets the debt off their plate faster!