Student debt in the U.S. is reaching new heights.

In 2015, student loan debt was $1.2 trillion, compared to $0.2 trillion in 2003, reports the Centre for Retirement Research at Boston College.

Further, U.S. student loan debt now accounts for more than 30% of total household non-mortgage debt, surpassing credit card debt in 2011, notes the study. U.S. grads in 2013 had $31,000 in student debt.

And student debt isn’t a problem in just the U.S. — Canadian post-secondary students also face growing tuition fee costs, which could force them to take out larger loans.

The Canadian Federation of Students warns annual tuition fees could rise to $19,900 in 2035-2036, reports’s Suzanne Sharma. Students may not be thinking about the realities of debt, so advisors should help.

Have frank discussions about what it means to take out a loan. The government may offer your client’s child $10,000 annually, but she doesn’t have to use the whole amount if she only needs $8,000. Explain how blowing that extra $2,000 on pizza each year, for instance, will amount to the costliest pizza she’ll ever have, thanks to interest.

Read more on how you can help.

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Too many students don’t know the terms of their loans and the fact that debt is limited to 7,300 per year (but you have to file taxes) and that the grace period is not graceful at all, but rather a very expensive 6 months of interest. The information is out there, but not easy to find and not clearly communicated to borrowers. It should be emailed out, not just hidden somewhere on a site that is different from the one where loans are administered during studies. Education is a necessity, and the huge loan burden on poor and lower middle class students is a drag on their life plans, which becomes a drag on the economy when young adults aren’t out there spending money and planning for their futures.
(Edited as per T&C)

Thursday, Apr 28, 2016 at 8:00 am Reply