FARMINGTON, Minn. ---- Brittney Keough followed all the right steps. The 26-year-old graduated with a bachelor's degree in marketing. She nabbed a stable full-time job in her field. Despite all that, she can't afford to live on her own.
"(My student loans) have stopped me from even putting money into the economy. I’m not buying a house. I’m not buying much of anything. I’m just paying off my debt," said Keough, who graduated with $60,000 in student debt.
By living with her parents in Farmington and consistently making her monthly loan payments, Keough has paid off about $15,000.
"My student loan payments per month are as much as an average mortgage payment. I pay about $1400 per month on student loans so that really limits my options," said Keough.
Keough is one of millions of millennials who are moving back home with their parents, partly due to their mounting student loans.
According to the Pew Research Center, 26% of millennials nationwide are living back home with their parents, despite the fact that the job market has improved.
"We live in an economy that rewards education, sometimes slowly," said Chris Farrell, MPR's economic contributor.
TIPS FOR STUDENTS AND PARENTS
"Parents need to sit down that junior, senior year [of high school] and start having conversations about how ]their children] are going to repay this debt," Farrell advises.
Farrell also suggests finding a free student loan calculator online and calculating how long it will take to pay off that loan amount.
"Post-secondary education pays off but that doesn't mean you can borrow as much as you can because the thing about the lending industr, they'll lend you far more than ever makes sense."
TIPS FROM FINANCIAL ADVISOR DAN AMENT OF MORGAN STANLEY
According to the Minnesota Department of Higher Education, student loan debt now averages more than $31,000 for MN college graduates, rising the rate of inflation over the last decade.
For those graduates managing student debt, parents co-signing liabilities and families considering college choices and budgets, it is important to thoughtfully plan your financial path.
Dan Ament, a financial advisor with Morgan Stanley, shares these borrowing tips.
- Borrow only what you need to cover education expenses …. Not lifestyle expenses
- Remember that student debt doesn’t go away …. Even in bankruptcy!
- Public Service Loan Forgiveness (PSLF) Program - The PSLF forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.
New Minnesota SELF Refi Program - Offers both Fixed and Variable rate refinance options. Borrowers must meet qualification criteria including residency, confirmed graduation, minimum credit score, credit history criteria, debt-to-income ratio limits, etc.