by our College Data Analytics TeamThe class of 2016 graduated with an average of $37,172 in debt per student! The average student loan payment after graduation for all students is $351.
Students can either take out private or public loans. To receive a public, federal loan, you must fill out and submit the Free Application for Federal Student Aid (FAFSA). Federal loans tend to have better interest rates and repayment options, so it is recommended that most students start there.
The best student loan is a subsidized federal loan. Subsidized loans do not accrue interest until after you graduate with your degree. After that, an unsubsidized federal loan is probably best. For up-to-date interest rates on federal loans, see this resource.
The most important step in reducing student loan debt is to make a wise college decision. Students who graduate with the most debt tend to be those who change majors or transfer schools, which increases both the time and cost of completing a degree. Other ways of reducing debt include:
Debt forgiveness is currently available for some public workers such as teachers in high-risk locations. Students can also apply to have their loans discharged if their school closes. Learn more about what options you have here.
Defaulting on your student loan will do serious damage to your credit. The federal government also may decide to garnish your paycheck or even social security payments. Avoid loan default at all costs.
Unsubsidized student loans accrue interest each month, even while you are in college. Unless you pay that interest each month, what you owe after graduation might surprise you.