Down Payment Vs Student Loans: How To Decide Where To Put Your Money Personal finance

Once you’ve secured a solid financial foundation, you need to weigh the details of your student debt balance.

In the United States, the average borrower owes about $ 29,000 on bachelor’s student loan debt, that number jumps to $ 66,000 for master’s degrees in general, and it rises to $ 145,500 for law school. , $ 202,400 for degrees in health sciences like dentistry and pharmacy, and a whopping $ 246,000 for medical school, according to the National Center for Education Statistics. From bottom to top, it’s a difference of $ 217,000.

Interest rates on student debt also vary. The rates on federally guaranteed debt for undergraduate degrees are the lowest and range from 2.75% to 4.66%, depending on the year you took them out. Graduate debt bears interest between 5.3% and 6.6%, and PLUS loans can be as high as 7.6%. Interest rates on private loans are generally higher, ranging from 3.34% to 12.99%.

Where your debt falls within these ranges will help you determine the best option for you. A difference of a few percentage points in your interest rate is a lot of money over a period of years. For example, at 3%, a total loan of $ 29,000 would cost you $ 4,860 in interest over 10 years, while a loan balance of $ 246,000 would cost $ 39,050.

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