In 2019, more than 47 million Americans have student loan debt, according to Forbes®. The aggregate value of that debt amasses to nearly $1.6 trillion. This means that, after mortgage debt, student loans represent the second highest consumer debt category.
As a result, millions of Americans view paying off student loans as a financial priority - especially if it means paying less interest over the life of their loans. The overall average interest rate for student loans in the U.S. is 5.8%, according to the nonprofit, non-partisan think tank, New America™. The sooner borrowers are able to pay off the principal on their debts, the less money they'll pay in aggregate for their educational loans.
Prioritizing repayment
Particularly for federal student loans, there are a variety of loan forgiveness programs that forgive part or all of a federal loan if certain eligibility standards are met. Many of these programs apply for professional educators and those in public service sectors.
However, the majority of Americans will have to pay off their loans out of pocket. To this end, it is important to make monthly payments by the agreed upon due date for the sake of maintaining a healthy credit score and staying on track for repayment. Borrowers who struggle to make payments on time should work with their lenders to customize their repayment plans.
Beyond timely repayment, individuals who want to pay off their loans faster may have several strategies available to them to help reduce the amount of money paid over the life of the loan.
For information about these expedited repayment strategies, check out Comerica Bank's infographic about paying off student loans more quickly. Alternatively, you can contact Comerica Bank to learn more about student loans and finance management.
