More households face mounting student debt
PHOENIX — A new Pew Research Center study said 40 percent of U.S. households headed by someone under 35 are dealing with debt from student loans, double the percentage from 20 years ago.
A Valley financial expert said one reason may be that more people are going to college.
“Twenty years ago, it was probably 50 percent of the population that pursued a baccalaureate degree,” said Mike Sullivan of Take Charge America Credit Counseling Service. “Now it’s 70 percent.”
Sullivan said that someone with debt from student loans needs to put other things on the back burner until it’s paid off.
“You can’t buy a house, you can’t buy a new car and you probably shouldn’t get married,” he said. “You need to pay down that debt to a manageable level before you take on any other responsibility or any other debt.”
But Sullivan admitted one way to deal with that debt could be to roll it into another loan, as long as it’s not a mortgage that will take year to pay.
“If, for example, you have the capability to get a personal loan at a lower interest rate, perhaps at about 5.8 percent interest right now, and pay off your student loans that are commonly around 6.8 percent right now, I would probably do it,” he said.
Sullivan said that for an emergency, a personal loan can be discharged in a bankruptcy. Student loans can’t.