How much of your income goes to paying off student loans?

Everyone has been there.

It’s close to midnight and you’re in the family room staring at a computer screen. A pile of bills and ripped envelopes lay scattered on the coffee table. At that moment, you’re trying to convince yourself that you can survive on having just $20 left in your checking account. Pay day is only a week away. You can do it. You’ve done it before.

It wouldn’t be the first time that all you’re money went to cover the monthly obligations, leaving your discretionary budget in the red.

You pay the bills and let out a brief sigh. It’s going to get better, soon. Right? Someday, you’ll be able to pay all the bills and still have money left over. Right?

For many people, this scenario is a month-to-month reality. Others have just stopped paying some bills all together.

One of these casualties is the student loan payment.

For example, a recent study by TransUnion, one of three major credit-reporting agencies found that 65.5 million of 128.8 million student loans outstanding as of last March were deferred – meaning repayment of principal and interest was temporarily delayed.

Why ?

Well…it’s because may student loan payments are often too much for people to handle.

I’ll give you a real life example.

A friend of mine has a student loan from graduate school that, after consolidation, costs about $320 a month. She makes about $32,000 per year. Coupled with rent, utilities, a car payment and groceries, that loan payment is taxing on her budget.

Now, I’m the first one to say that people are responsible for their actions. She took out the loan knowing what it would cost, so she shouldn’t be complaining now. I’ve got that.

However, there’s a good chance that she and others in her position will put off making large purchases such as buying a home or starting a family until her finances are under control. That could take five years or more than a decade. Who knows?

Not everyone can be expected to go into major debt just for the pleasure of signing a mortgage.

And, don’t ask me. I don’t know what the answer is. Aside from working 24/7, I have no idea how to get more discretionary income into the hands of consumers.

How about you? What have you given up just to pay the bills?

This entry was posted in Biz and Tech Expo, City of York, Consumer issues, credit, Do it yourself, Economic Outlook, Manufacturing, payment, Real estate, Sean Adkins, Social Media, Taxes, Your money. Bookmark the permalink.

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