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All you need to know about America's student debt crisis

It is a well-known fact that attending an American university is quite expensive that costs around $40,000 per year in tuition fee alone at a private university. And considering this situation, the only way for opting a higher education is through a student loan. The estimate is around 45 million American students owe a student loan which contributes to an overall debt of $1.6tn.

The only options available for prospective students are a government-funded federal loan and a private loan. The main drawback is the interest rate that comes with it which ranges from 12% - 14%. There is a limit on how much you can borrow depending on your dependency status, undergrads can borrow between $5,500 and $12,500 a year in federal loans whereas professionals and graduate students can avail up to $20,500 a year. Usually, the federal loan grants repayment starts after graduation on a monthly and six-monthly for the next 10-25 years.

The average student debt in the US alone in 2018 is around $39,000 according to a report. At an average, student debt in America is quite high as compared to the UK according to the analysis by YaleGlobal. The most affected are the students of a private not-for-profit institute who bears up to $32,000 in the loan as compared to an average public university student who bears up to $27,000 in the loan.