Federal student loan debt considered a financial crisis

Federal student loan debt considered a financial crisis

LUBBOCK, Texas -

43 million Americans owe $1.4 trillion in federal student loans, an average of more than $32,000 per borrower. Some experts are even calling it a financial crisis.

46 percent of Texas Tech students receive financial aid, according to a recent study by the U.S. Department of Education

"What happens with a lot of students and the student loan debt is they either don't have anything saved or they take out again more debt than they need or is manageable if you will for their degree," financial adviser Jeff Nicholas said.

He said a good place to start in keeping debt down is going to community college. 

"South Plains is a great community college here locally that we have in Lubbock," he said. "It's affordable, things transfer to other universities. It's a great way to start out to be able to keep the cost down and to be able to work, as well as be able to cash flow or to pay for that school without going into a lot of debt."

Nicholas also suggests students pick up a part-time job as a means to offset college expenses. He said a part-time job can not only provide additional income but can also be a good way to gain practical experience before entering the workforce. 

"And even look at something in that career field that you're looking for to give you an idea if that's even something you want," Nicholas said.

Scholarships are another way students can avoid taking out loans. Nicholas said even just a few hours of work filling out applications can aid in tuition. 

"There's a lot of money out there that companies, individuals, charities whatever are willing to give in terms of scholarships if you'll just take the time to apply," he said.

Another big expense can be student housing. Nicholas suggests either sharing a room or splitting an apartment to keep cost of living down. He added even small expenses like books can rack up debt. 

While student loans are costing Americans thousands, the Federal Reserve reports the number of people going to college keeps going up. 

"I'm not going to say it's a bad thing to go into debt for school to get an education, but it's how you manage that," Nicholas said.

Now it's more common for families to have educational debt than it was a generation ago. Nicholas said it's all in how you budget.

 

 

Powered by Frankly