Saving for the future is easier said than done if you’re working to pay off student loans.
Of the 44 million people with student loan debt, about 8 million are over age 50, with some of them paying debt for their adult children or grandchildren, says the Consumer Financial Protection Bureau. That can make it much tougher to save for a rainy day, let alone a comfortable retirement.
Yet student loans have allowed many families to send kids to college and set them up for a successful career.
So what’s a family to do?
Limit college costs
Sallie Mae, which began as a government-sponsored enterprise to support student loans but is now a consumer banking business, says students are taking steps to make college more affordable. That way they don’t have to take out as many loans in the first place.
About half of students are living at home, according to Sallie Mae. About 1 in 4 are trying to earn a degree faster, and 1 in 3 are going to community college as a first step toward a bachelor’s degree.
Getting college credit for advanced courses that you completed in high school may allow you to skip ahead in checking off requirements for earning your college degree.
Consider careers that could give you debt relief
What if you’re already out of college or about to graduate? Believe it or not, it’s possible to find a job that can help you pay off student loans. (For what it’s worth, it’s also possible to find the average salary for certain occupations, according to the Bureau of Labor Statistics. But keep in mind that a few outliers can throw off the whole average.)
To attract employees, some employers are including student loan help in compensation packages.
Pay off debt wisely
A financial professional may be able to provide tools for personalized guidance for paying off loans. In some cases, you may be better off paying just the minimum due on your loans and investing any leftover cash from your paycheck in a retirement account versus paying off all your student loans as soon as possible. A financial professional can help you review what might be a good strategy for you.
Consolidating loans also may be an option, but again, it’s worth checking with a financial professional to make sure you understand the terms.
Take comfort in knowing college can be worth it
As higher education gets more expensive, is a college diploma is even worth it?
Some notable household names have famously launched successful careers without graduating from college. But in general, those who have graduated college are earning average hourly wages of $19.18 while those who have completed high school are earning average hourly wages of $10.89, according to the Economic Policy Institute.
Unemployment rates over the past few years have been lower for those with a college degree than for those who graduated high school and started looking for work, according to the Economic Policy Institute.
Things to Consider:
• Curb debt with these cost-cutting options: earn college credits while in high school, go to school in your home state, live at home instead of on campus, and attend a community college for your freshman year.
• You may want to look for jobs that offer student loan help – or a salary high enough to help you pay off loans faster.
• A financial professional can help you evaluate your debt and how to manage it.