May 22, 2019
The headline grabbed everyone’s attention: the commencement speaker announced he was paying off all the student debt of every member of the graduating class. But how much debt could 400 students have $40 million. Yes, let’s right. Every graduating senior from Morehouse was leaving $100K in debt.
At 8% interest, you’d have to pay $800/month for 22.5 years. If you were 23 when you graduated, you’d be 45 before your student debt was retired. And where does that $800/month figure come from? The average college grad makes just over $50,000/year for take home pay of $3400/month. Let’s say you’re paying $2k in rent and utilities, $1000 for food, phone, transportation and clothes. By simple math you’ve actually only got $400/month to pay your debt. So, you either don’t live where you want to live, you don’t do what you want to do, or you don’t pay your debt. Which is how so many young adults end up with delinquent debt, which hurts their credit score, crippling them from getting good rates on everything from cars to houses to refinancing.
How widespread is the issue? 44M Americans have a student loan totaling $1.48 trillion in outstanding debt. On average, students in the 2017 graduating class owed $39,400 at graduation. They will pay that back at $800 for the next 15 years. And a full 11% of student loans are more than 90 delinquent.
There’s a church near Howard University that fasted for a month to pay off the student loans of 34 graduating seniors. Which is a good reminder that resolving debt requires sacrifice.
Related conversation about medical debt with RIPMedicalDebt is here.
This episode also features a conversation with Alan Cross about the good, the bad and the ugly on the U.S. southern border. Alan gets real about what’s really going on, how Christians are helping and the truth of who is seeking asylum. Alan was recently at the border and was surprised to meet many evangelical Christians among the migrant population.
Find resources discussed on today’s show here: http://www.cdionline.org/
The Washington Post article referenced in today’s conversation is here.