Student loans are a financial problem facing millions of college grads. Because so many U.S. consumers have difficulties repaying their loans and simultaneously balancing other life expenses like a family, a home, and other bills, many of the statistics you read are in reference to defaulted loans, past due loans, and those who cannot afford to pay. Seldom do you hear about borrowers who take out loans for college, soon after begin a well-paying career, and have little trouble managing their loans.
The American Student Assistance Organization (ASA) reports that of the 37 million borrowers who have outstanding education loans, around 5.4 million of them have at least one past due account. This leaves another 31.6 million borrowers, or around 85 percent, who are not past due on their education loans. The ASA also states “as of early 2012, borrowers in their 30s have a delinquency rate (more than ninety days past due) of about 6%, while borrowers in their 40s have a delinquency rate double that, at about 12%. Borrowers in their 50s have a delinquency rate of 9.4% and those over 60 have a delinquency rate of 9.5%.” When you look at this data from a different perspective, it tell you around 90 percent of borrowers within each demographic age group (30s, 40s, 50s, and 60s) have not reached the ninety-day point of delinquency.
Some of this group is comprised of borrowers who have deferred their loans, have their loans in forbearance, or are still under the grace period and are not yet required to repay. Data from the Consumer Financial Protection Bureau indicates these groups account for around one-third of direct loans and around one-fourth of Family Federal Education Loans (FFELs). The largest group of borrowers, however, is those who are in fact repaying.
While attention to the topic of student loan reform is an absolute necessary, those who repay are often overlooked. If you are one who repays your loans, you may have considered taking on more loans to further your education. The Bureau of Labor Statistics reports the unemployment rate for doctoral degree holders at 2.2. percent, compared to a 4 percent rate for bachelor’s degree holders. In addition to lower unemployment rates, advanced degrees offer other benefits. Here are a few cases in which taking out more loans for school may be ideal.