Graphic courtesy of Bloomberg Businessweek
Reports have emerged recently with a daunting figure. Collectively, Americans now reportedly owe more than $1 trillion just in student-loan debt. Although part of the idea of getting degrees is to put yourself ahead by netting higher-paying jobs, debt payments are surpassing income levels for too many these days.
In turn, sky-high student-loan debt is preventing some from fulfilling the "American dream" by getting a mortgage for a house. New regulations mandated in January of this year allow no more than 43 percent of a borrower's monthly income be used to pay debt obligations. With an economy still in recovery mode, crippling debt ratios have caused many to put other plans on hold, such as purchasing a new home.
What's the answer to this student-loan debt conundrum? Analysts will debate the alternatives on end, but for graduates already in the hole, you would probably benefit from consulting a financial adviser for counseling specific to your situation. If you are in the planning stages for your children's education, you can take advantage of a 529 plan to receive tax benefits and other incentives so you and your offspring aren't overburdened by debt.
There are still plenty of statistics out there supporting the case for a college education, but there's no denying it isn't as affordable as it used to be. It is well worth the time to research all of your degree options and comparative costs, as well as factoring in existing debt, before getting yourself into a debt hole that prevents you from fulfilling other goals.
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