Understanding the Burden
About 45% of 2025 high school graduates are expected to pursue a four-year college degree, with over a third likely to incur student loans, amidst the highest federal loan interest rates in a decade.
The average tuition and fees for in-state, public four-year colleges is approximately $11,600, with graduates potentially facing an estimated $40,000 in student loan debt.
Mitigating the Impact
Students are advised to prioritize affordable education options, such as starting at a community college, and to maximize "free" financial aid by completing the FAFSA annually.
Federal loans should be prioritized over private loans due to better protections and lower interest rates, and students should consider making interest payments while in school to reduce the overall debt burden.
Strategic Repayment
The standard repayment plan for federal student loans spans 10 years, which could result in a monthly payment of around $435 for a borrower who takes the maximum federal loan amount.
Alternatives to the standard repayment plan exist, but borrowers should be aware of the implications on interest paid and monthly payment amounts before making a decision.