Surviving Student Loans And Moving Forward

PITTSBURGH (NewsRadio 1020 KDKA) - You just graduated college, you have that piece of paper in your hand saying you did it.

You're ready to take on the world, get that first job, buy your first house or plan that dream wedding, but wait, in the mail comes your first student loan payment.

Today college graduates come out of school with so much accumulated debt that they can hardly survive financially, let alone plane for a financial future.

Jayme Meredith of Hefren-Tillotson says not to worry, just having the right plan makes all of the difference.

"The latest statistics say we are facing about a trillion dollars of student loans and if you look at it compared to other household debt, credit cards, mortgage rates and car loans, all of the other household debts have peaked and are actually coming down which is a good thing. But student loans are continuing to climb," Meredith said.

Meredith talked about student loan debt management on the KDKA Afternoon News with Bill Rehkopf. He says that student debt is a two-sided coin, floating from one extreme to the other. So what is a reasonable price to pay?

"When you look at everything in averages, it's about $20,000. So they average student is graduating with about $20,000," Meredith said. "A lot of those kinda of headline catching people are the folks that are graduating undergraduates $75- or $125,000 in debt and those are the outliers and that is absolutely kind of ridiculous."

Loans are helpful because they allow pretty much anyone to get a college degree and in today's day and age a college degree is required for many more jobs then ever before.

Comparing college graduates versus high school graduates, the difference in income almost doubles. Meredith says what people need to take into consideration is their major, and what job they will get upon graduating then figure out average salaries and figure out what debt load you can take on.

Today with students paying off their loans they don't have the extra money to put away for investments or saving up for the down payment on a house. What can we blame for lack of financial preparation? Ironically Meredith thinks its a lack of education.

"People don't understand really how the ins and outs of personal finance work. How do you calculate a loan payment? How long is this going to take?" Meredith said. "Institutions lend money because it's a profitable way to do it. If you are not paying off the interest that interest is capitalizing, your debt is growing a lot of people have no concept of how that exists."

It's always smart to have a plan. So you've accumulated all this debt now how do you pay it off? Meredith says its a simple concept.

"Pay off the most expensive debt first. If you've got credit cards pay those down, then start with the most expensive student loans, save that cheap debt for later. But you know what live in your parent's basement save every penny that you can pay those debts off and you will be happy that you did it," Meredith said.

Listen to the whole interview below:

You can also listen to the KDKA Afternoon News with Bill Rehkopf weekdays 3-7 p.m.

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