No one today can afford college tuition on their own, but student loans have made it possible today.
Gone are the days when college was actually affordable. But wait, was it ever?
Every student dreams of studying in a prestigious college, doing their favorite degree and ending up with their dream job. But all of this process requires money, and lots of it! An average American earns only enough to meet his daily expenses and save a little for a year-end vacation. Affording college tuition in this income is not possible for many.
The government understands this, which is why it offers student loans to many of its students. They take the loan and whether they complete their degree or not, they have to pay it all back in portions for the next couple of years.
Statistics show that over 35 million students have borrowed student loans to pay their fees and the current student loan debt is $1.56 trillion.
Current Student Loan Interest Rates
Here are the current student loan interest rates combined in one table.
|Refinance student loans|
|Fixed||3.20% to 8.63%|
|Variable||1.99% to 8.38%|
|Private student loans|
|Fixed||3.82% to 14.50%|
|Variable||1.20% to 12.99%|
|Federal student loans (fixed)|
|PLUS (Parent, Grad)||5.30%|
Note: Sample rates have been extracted online, courtesy of NerdWallet.
Average Student Loan Interest Rate
The average student loan interest rate is 5.8%. With a 5.8% interest rate on $30,000 of student loans, a borrower would pay about $9,600 in interest throughout 10 years. This is the basic of how a student loan works.
Average Private Student Loan Interest Rate
This figure is obviously higher, with the average private student loan interest rate hitting almost 7.81% in 2020. More than 1.4 million students look for private student loan options to fund their college fees and their routine expenses.
Student Loan Repayment Calculator
Once you’ve gotten the loan, the next step of actually paying it back is severe. Federal loans generally have a standard repayment period of upto 10 years whereas repayment for a private student loan can range anywhere between 5-20 years.
If you’re a graduate, the graduate student loan rates will start with a very low amount of $172 a month, but will eventually rise up to $516 a month. This means the average amount of monthly repayment is somewhere between $344.
There are tons of online calculators available on the internet which allow you to make an estimate of how much money you will be repaying each month. You can try this Student Loan Repayment Calculator to have a basic estimate of the amount.
Best Student Loan Refinance Companies 2020
Here are the best student loan refinance companies of 2020, so if you’re looking for a student loan, you should head to these companies for assistance.
- SoFi Student Loan Refinance: Best for Overall + Fast payoff + Parent loan refinancing
- Earnest Student Loan Refinance: Best for Overall + Law school loan refinancing + MBA student loan refinancing
- CommonBond Student Loan Refinance: Best for Overall + Customer service
- PenFed Student Loan Refinance: Best for Overall + Fast payoff + Customer service + Student loan refinancing with a credit union
- Wells Fargo Student Loan Refinance: Best for Overall + Student loan refinancing with no degree + Student loan refinancing with a bank
- Laurel Road Student Loan Refinance: Best for Medical school loan refinancing + Dental school loan refinancing
- Education Loan Finance Student Loan Refinance: Best for Veterinary school loan refinancing + Customer service
- Prodigy Student Loan Refinance: Best for International student loan refinancing
- LendKey Student Loan Refinance: Best for Student loan refinancing with low income
Even though higher education is super expensive in the country, still there are many companies and federally funded programs who have made it easier. With an aim to provide easy student loans with a repayment plan, many students have taken advantage of such policies.
Repaying student loans in their own time is important, however with the rising interest rate if it isn’t affordable for some students to pay back, there are specific programs that get your loan forgiven too. If you have other sources of paying your college fee, take a very nominal amount of loan which is also easier for you to pay back when the time comes. Even if students don’t graduate and dropout in the middle of the degree, they HAVE to repay the loan back.