Did you know that maintaining good financial habits can help you easily pay off your student loans? Take a look at these shocking student loan statistics in 2019:
- 69% of college students have student loans and graduated with an average debt of $29,800
- 14% of their parents took out federal parent PLUS loans with an average debt of $35,600
However, according to the Federal Reserve System, almost one-fifth of students were behind on their payments and roughly half of borrowers could afford to pay off debts. We understand paying off debts is painful, but is there any way we can make it easier? Allow me to share this story from Fox News with you:
The Ross Family and Their Debt Pay-Off Plan
The Ross family from Michigan were dedicated to becoming debt-free before starting a family. At first, following a wise suggestion, they applied for deferment and deferred their loans long as possible. During that time period, however, they only made minimum payments to maintain good credit. Unfortunately, they were not aware of the snowball effect until the interest rate mounted up to 7%. Always keep in mind: It costs money to borrow money. How you manage your interest rate and processing fees can determine whether or not you have to high-cost borrow (with a high interest rate) or a low-cost borrow (with a low interest rate).
Due to the increase in their rate, the Ross family decided to try something different. They changed their financial habits drastically, while making a total of $150,000 in family income. That’s when the magic happened: They paid off $120,000 in student loans in less than 3 years! Curious about how they made it happen? The Ross family would simply tell you: it’s all about financial habits.
So What Really Makes a Difference?
Attending college is the first financial decision for most teens. Studies have found that taking a course in personal finance before college helps students change the way they plan to finance their degree. A systematic financial literacy program is imperative to guide students to make wise financial decisions; even more, it helps tremendously to avoid financial traps and personal debts. Students who have attended financial courses tend to live a more saving-oriented lifestyle than those who have not.
Sadly, the National Financial Capability Study revealed that only few students could answer financial questions correctly and only one in six high schoolers could meet basic financial proficiency. But don’t worry! We are here to help you reach your goals!
Wealthy habits focuses on improving teenagers’ financial habits to change their mindset on money. We have created a solid and practical financial literacy program that includes building an investment philosophy, managing their relationship with money, creating financial accounts, accumulating credit responsibly, assessing loans and debts, and improving personal beliefs on money behaviors. Our hopes are to see our students go off to college and make it a point to shift from high-cost borrowing to low-cost borrowing to finance their degree. While scholarships and grants are the way to go, borrowing student loans doesn’t have to be the worst thing in the world. Learning about the right financial habits now can ensure they can pay off their debts like the Ross family someday. Check our programs! A small decision makes a whole difference.