S/O Student Loans: Average age to pay off is in 40's (21 yr)

[downtoearth]

This is the age most Americans pay off their student loans

www.cnbc.com/2017/07/03/this-is-the-age-most-americans-pay-off-their-student-loans.html

Research from Citizens Financial Group suggests that 60 percent of student debt borrowers expect to pay off their loans in their 40s. Data collected at the state level supports these findings. A study from the OneWisconsin Institute finds that it takes graduates of Wisconsin universities 19.7 years to pay off a bachelor's degree and 23 years to pay off a graduate degree.

The Federal Reserve reports that there are that there are 6.8 million student loan borrowers between the ages of 40 and 49 and that together, these graduates hold a collective $229.6 billion in debt. That means that Americans in their 40s with student loan debt each have an average balance of $33,765.

Another article agrees, and noted that in 2007 it took about "In 2007, ...student loan securitization data was used to estimate that the average borrower time in repayment is 16–18 years." 

Then there are all these forums that also discuss how long to payment based on amount of starting salary.  If you take loans out for 1/2 your starting salary, it should take about 5-7 years.  If you took loans out for 100% of your starting salary, it should take 10-15 years. If you took loans out for >100% of your starting salary it will take longer.

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Are you surprised by this or were you when you left school?

Basically, I had about $35k federal loans from undergrad and started salary about $30k out of undergrad.  Went back to grad school (so no payments during those 3 years, but no new loans) and came out of grad school with a salary of about $42k/yr.  Then we consolidated my $30k with H's $5k and so we are probably on year 16 of actually paying - almost done too. This is sort of what I expected, I always assumed we'd pay loans until 40's - get a break for about 8 years from daycare and loans, then start paying on college tuition for the kids.

[Velar Fricative]

Sounds about right. I'll be just under 40 when I expect ours to be paid off and DH is already 42. Sigh.

I'll be honest, when I graduated from undergrad I totally thought I'd have them paid off by 2014, which would have been the end of the original 10-year term. I was 32 then. But then I went to grad school (and took out more loans). And I consolidated when I realized the magnitude of these payments and extended the repayment term. So here we are.

Also, I believe I read that people ages 50+ are dealing with huge increases in student loan debt, either via parent loans, co-signing with their kids or others, and taking out loans themselves to get more education after the recession. It's such a huge economic issue.

[andreay82]

The amount of SLs I had at graduation was very close to my starting salary, maybe a bit more. The 10-year standard repayment period payments were overwhelmingly high for what I thought I could handle at the time so I resigned myself to paying them "forever". It's literally been in the last year or so that I can wrap my head around actually paying them off in a reasonable time, and I'll hopefully get them paid before 40.

[kadams767]

I am not that surprised, given today's average debt load. I finished law school in 2007 with $65k in loans and a salary of $70k. My initial plan was to pay them off within 5 years. This would have been mildly aggressive, but the plan took a nosedive when the recession hit and my industry crashed. Salaries were frozen and my firm didn't pay bonuses for several years, and since I was living in fear that I'd lose my job, I stopped paying anything above the minimum payments for awhile. I was thankful that I put any extra money in savings instead of towards my loans when my husband did get laid off. I didn't start paying extra again until things stabilized for us in 2011, and ultimately didn't end up paying them off completely until this year, so 11 years instead of 5, oops. I am 38 now, so this timeframe seems pretty accurate to me.

[njw]

I probably won't pay mine off until I'm 50ish. Between the recession and my job requiring a master's degree with a very low salary (I teach), I'll be surprised if I pay them off before I'm in my 50's. I've just accepted that I'm always going to have a 500ish monthly payment for the rest of my life. It sucks, but unless we hit the lottery, it is what it is.

[pixy0stix]

Yup, I came home and asked DH about his loan (for undergrad). He said he's projected to pay it off at 40.

[bex]

Mine should be forgiven in 2 years, so I’ll be 38. If I was paying them off, I would prob think mid 40s (bc I would have paid more on them). H’s private loan will be paid off in 3 years, so 39, and then his federal prob 10 years after that. Ugh.

[Jalapeñomel]

We will not pay it off in our 40s.

[Pom]

We are about to pay off H’s. He’s 46. (He did start college at age 25).

[underwaterrhymes]

Aug 10, 2018 19:31:04 GMT -5 Jalapeñomel said:

We will not pay it off in our 40s.

Not here either.

[cville]

I'll be 53 if I keep just paying minimums.

[idahome]

Not even close to paying off my loans in my 40s; trying paying them off just before I retire instead.

Having only one stable income stinks.

[mrsukyankee]

I only paid them off last year (age 48 with both undergrad and grad school) because of the exchange rate made it a lot easier along with my husband's income (as he was in the generation where UK citizens didn't need to pay for university).

[wildrice]

I'll be at least in my 40s, since I'm 36 now and certainly won't be done in 4 years. If I do loan forgiveness mine should be done when I'm 43/44 but that's up in the air a bit.

If H does PSLF we will be at least 47 when his go, so they are a part of my monthly budget until then. If he doesn't do PSLF we might pay them off before retirement. But, our situation isn't typical since he isn't even entering repaying until he is 37.

I should add, if we don't end up doing PSLF we MAY try to pay them off earlier anyway. This will depend a lot on our unknown future salaries though, so I can't really plan on or estimate that yet. Interest rates are high so I don't really want to keep them for 25 years if we don't have to.

[macmars45]

I hope we'll pay off H's SLs before H is 35 (so within the next 1.5 years). That's our rough plan.

ETA: when we graduated our combined income was no where near the amount H owed on his SLs. H graduated in 2007 and got an entry level accounting job. I graduated in 2008 and couldn't find a decent paying FT job for 3 years so I worked two crappy PT jobs that entire time.

[janegold]

I’m not surprised at all. You have to be really aggressive with payments to pay them off within anywhere near a reasonable time period, and young adults tend to have many competing needs for their finances - mortgage, daycare, etc.

I had hoped to pay my law school loans off in 10 years (this was what my school’s financial aid office really drilled into us) but it will end up being 15 years for me. I don’t mind much - in the meantime, we were able to buy our home and afford to have a child, so it was a worthwhile trade off.

[pinkdutchtulips]

Aug 11, 2018 1:09:29 GMT -5 idahome said:

Not even close to paying off my loans in my 40s; trying paying them off just before I retire instead.

Having only one stable income stinks.

this ... being one income doesn't help.

My loans were 3.5x my starting salary, I feel like I've been swimming upstream in heavy currents every since 😩

[LoveTrains]

We are pretty lucky. Went to a $$$$ school but I only had about $15K in Stafford loans and my H had about $20K from undergrad. We paid them off in ten years but we also had very low interest due to graduating in the early aughts.

[ladyk]

I ended up doing a consolidation loan with a 25 year term about 3 years out of law school when I couldn't swing $865/month. Add in a few segments of unemployment or hardship deferrals, I'll be 56 when mine are paid off. I'm lucky with my 3.25% rate though.

[ohgillian]

I had zero from undergrad and $40 for grad, and my starting salary out of grad school was $40. I was 24. I paid them off around age 38 if I recall. I was on various payment plans over time depending on my finances — income contingent at one point, then standard at one point.

[idahome]

Aug 11, 2018 23:57:31 GMT -5 pinkdutchtulips said:

Aug 11, 2018 1:09:29 GMT -5 idahome said:

Not even close to paying off my loans in my 40s; trying paying them off just before I retire instead.

Having only one stable income stinks.

this ... being one income doesn't help.

My loans were 3.5x my starting salary, I feel like I've been swimming upstream in heavy currents every since 😩

I feel ya on swimming upstream in heavy currents. It’s painful.