It’s the ultimate catch 22. Unless you’re a preternaturally gifted visionary or entrepreneur, you need to go to college to get a job. But the cost of college these days is s high that you’ll most likely need to borrow a significant amount to pay for your degree. Increased pressure to get a post-secondary degree combined with sky-high tuition prices have causes student debt rates to climb.

If you’re looking at five or even six figures to pay back, you’re not alone. If you’re still in the process of deciding whether or where to go to school or whether you should go back to school, understanding what today’s debts rates are can help you make the best decision.

Student Loan Debt Statistics

As of 2018, the total amount of student loan debt in the US was $1.48 trillion, according to Student Loan Hero. More than 44 million graduates had some amount of debt, and the average monthly payment was $351.

According to research from Pew, one-quarter of adults under the age of 30 had some amount of student debt. Debt rates were highest for people between the ages of 18 and 29. Just 4 percent of people over age 45 have student debt, and only 22 percent of people between the ages of 30 and 44 have student loan debt.

There are two reasons why older adults are less likely than younger adults to have student debt. For one thing, they’ve had more time to pay off their debts since graduating or leaving a degree program. For another thing, they were less likely to borrow money to pay for school in the first place.

Pew reports that more than two-thirds of college students in 2011-2012 took out loans to pay for school. In 1989-1990, just half of college students paid for school with loans.

Student Debt Rates Based on Degree

How much a student is likely to owe depends on when he or she went to school, where he or she went to school, and the type of degree earned. The average student debt amount for graduates in the class of 2016 was $37,172, according to Student Loan Hero. That average is the highest it’s ever been.

While $37,172 is a tremendous amount of money to owe right out of the gate, it’s important to remember that averages don’t always tell the full story, as they can be thrown off by a few very high balances.

You’ll get a more accurate idea of typical debt rates if you look at the median amount graduates earning a bachelor’s degree owed. In 2016, the median amount owed was $17,000, according to Pew. A small number, less than 25 percent, of borrowers, had student debt totaling more than $43,000. Another quarter had debts of less than $7,000.

However, once you get to graduate school, it’s a different story. The average grad school debt is $57,600, according to US News and World Report. The median amount owed by graduates of a post-grad degree program was $45,000, according to Pew.

US News attributes about 40 percent of the total outstanding student debt to graduate and post-graduate degree holders.

While borrowing six-figures worth of debt isn’t that common among undergraduate students (less than 7 percent have debt over $100,000), six-figure debt becomes increasingly prevalent among graduate and post-graduate students.

Dentists and doctors are among those most likely to be saddled with large amounts of student debt. The average dental school debt is $247,000, according to Forbes while doctors can count themselves lucky if they own less than $200,000 when graduating. The average medical school debt is $185,000, with the priciest med schools leaving students with as much as $259,000 in debt.

Private vs. Federal Student Loan Debt

Today’s college and graduate students have the option of choosing between federal and private student loans or a mixture of both. According to NerdWallet, about 7.5 percent of all outstanding student debt is from private loans. That accounts for around $102 billion worth of debt.

Students often elect to take out private loans because they aren’t getting enough financial support from their schools and other resources and because federal loans don’t cover the full cost of tuition, room and board, and other expenses.

Federal loans have loan limits, usually between $5,500 and $12,500 for undergraduates and up to $20,500 for graduate students. Private student loans don’t have the limits, so it’s easier for a student to borrow too much.

The interest rates on private student loans are often much higher than the interest rates on federal loans. While the federal student loan interest rate is usually between 4 and 7 percent, private loans can charge as much as 18 percent in interest, which can cause a borrower to end up paying a lot each month without making a dent in his or her debt.

What’s the Impact of Student Loan Debt?

For some borrowers, student loan debt isn’t such a big deal. They graduate with $7,000 or $10,00 in debt, they pay it off within 10 years, and they move on.

But when students are graduating with a four-year-degree with more than $25,000 worth of debt, or when students graduate with debt that is more than their first year’s salary, that debt can have a negative impact on their financial life now and well into the future.

For example, having to pay back large loan amounts usually interferes with a person’s ability to save for retirement and to save for a house. According to CNBC, if a young person funnels much of his or her salary into paying off debt, at the sake of not saving for retirement, he or she is likely to end up much poorer in the long run. Thanks to compounding interest, the earlier a person begins saving, the more he or she will have, even if he or she stops saving early on.

Student loan debt also affects the broader economy. For example, the more graduates need to pay towards their loans each month, the less they will have in the form of disposable income. That means less shopping and fewer nights out, which can mean that businesses in an area with a lot of recent, indebted graduates suffer.

High levels of student loan debt also negatively affect a person’s quality of life. Pew found that student debt holders were more likely to work at least two jobs and to struggle to make ends meet. They were also more likely to see their degrees in a negative light and to question whether going to school was worth it.

Can You Count on Student Loan Forgiveness?

For some borrowers, a light at the end of the tunnel comes in the form of student loan debt forgiveness. School debt forgiveness works like this. A borrower fulfills specific requirements for a specific amount of time, and his or her debt is “erased” or forgiven by the borrower.

One student loan forgiveness program is Public Service Loan Forgiveness. Under this plan, a graduate who works in a public service job full-time and who makes 120 on-time payments on his or her loan during that time will have the remaining balance forgiven.

That can sound like a great plan, but there are some things to know. First, it’s only available for certain federal student loans. Second, 120 on-time payments works out to 10 years worth of payments, or the same length of time as a standard repayment plan.

Third, and perhaps most important, is the job you need to have to qualify for forgiveness. You need to be in a public service job, such as with a non-profit or government service organization, for 120 months.

If you decide to pay back your federal loans on an income-based repayment plan, you might also qualify for forgiveness, but the time frame is much longer. Depending on the plan you signed up for, and when you signed up, your debt might be forgiven after 20 or 25 years. At that time, any remaining, forgiven balance will be counted as income, so you will have to pay tax on it.

How to Manage Student Debt

If you plan on going to college or have already graduated from a degree program, you probably can’t avoid taking on debt. That said, student debt doesn’t have to take over and control your life.

Although you might think that you need to attend the school with the $50,000 price tag to get the career and salary you want, that’s usually not true. If possible, go to the least expensive school possible, so that you don’t end up drowning in debt.

Once you leave school, make a plan to repay your debts. Enrolling in an income-based repayment plan might make the most sense if your salary is low when you first graduate. The federal programs cap your debt payments at no more than 15 percent of your discretionary income. You can always pay more if you want to, but you won’t feel like you’re being crushed under the weight of your debt.

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