In September, the Obama administration announced a series of changes to the Free Application For Federal Student Aid (FAFSA), the go-to form for prospective college students applying for federal student aid.
In December, the administration announced the Revised Pay As You Earn (REPAYE) plan, which lets select federal student loan borrowers cap their monthly loan payments at 10% of their discretionary income.
These measures have been taken to make the burden of student loans more manageable. The Associated Press found that Generation X, people ages 35-50, owe about as much money on their loans as new graduates even after years of payments, and that student loan payments are surpassing groceries as the biggest monthly expense for many households.
Writing for TIME, leading student financial aid expert Mark Kantrowitz estimates that more than 25% of borrowers are graduating with "excessive" debt. He explains that this debt load significantly influences how many borrowers live their lives.
I also found that students who graduate with excessive debt are about 10% more likely to say that it caused delays in major life events, such a buying a home, getting married, or having children. They are also about 20% more likely to say that their debt influenced their employment plans, causing them to take a job outside their field, to work more than they desired, or to work more than one job.
Things aren't getting better. Marketwatch estimates that America's total student loan debt grows over $2,000 every second. It's no wonder the government has taken notice.
If that hasn't given you a sense of urgency, watch the national balance increase on this student debt clock from FinAid.org:
Libby Kane is a personal finance expert who has reported and edited stories about money for more than 10 years. She previously held the Certified Financial Education Instructor (CFEI) certification issued by the National Financial Educators Council.Experience She has written and edited articles on everything from investing tips to model budgets and has interviewed dozens of authors, financial planners, and early retirees to share their advice, experiences, and insights with a global audience. Before joining Business Insider in 2014, she was an associate editor at LearnVest, a personal finance site to help women learn about money. Her work has appeared on sites such as MSN, AOL, Forbes, Slate, and The Street.Her team at Business Insider has tackled projects including:• Women of Means, a series about women taking control of their finances• Inside the Racial Wealth Gap, an exploration of the causes, effects, and potential solutions of the racial wealth gap in the US (finalist, Drum Award, "Editorial Campaign of the Year," 2021)• Strings Attached, a series of essays from people who have left insulated communities and how that journey affected their relationship with money• Master Your Money, a year-long guide for millennials on how to take control of their finances (first runner up, Drum Award, "Best Use of Social Media," 2022)• The Road to Home, a comprehensive guide to buying your first house (silver award winner, National Association of Real Estate Editors, "Best Multi-Platform Package or Series – Real Estate," 2022)Libby believes in one universal truth about money: Advice is never for everyone. The best strategies, tools, and products depend on your preferences, financial situation, history with money, and goals.ExpertiseHer expertise includes:• Behavioral finance• Early retirement• Budgeting• Saving moneyEducationLibby holds a bachelor's degree from Wellesley College.Outside of personal finance, Libby enjoys reading, baking, and walking her dog.
