How Much Do You Need to Earn to Pay Your Student Loans?

Photo (cc) by kevin dooley

Have you fallen behind on your student loan payments? You’re not alone.

The New York Times said between 25 and 33 percent of student borrowers are late paying their very first loan bill. And it continues to get worse. As many as 35 percent of borrowers under 30 are at least three months late paying their student loan bill. The Times said:

Let us pause for a moment to state the plain fact that the entire college financing system is a national disgrace. College costs are high, universities don’t counsel undergraduates well enough, families get in over their heads, there are too many types of loans, the repayment options are dizzying, and lenders and the companies that collect the payments are sometimes bad actors.

The Times created a student loan calculator that gives you a glimpse of the reality of paying off your student loan debt after college. You can also plug in the name of a college or university, see the average student loan debt there, and see what it will take to pay that off.

When I graduated from college I had about $17,000 in student loans (after I took some post-baccalaureate classes, my student loan balance soared to $27,000).

I plugged the $17,000 loan amount into the Times’ calculator. With a 10-year payoff period, my monthly payments totaled $177.50. My first television reporting job had a $16,000 salary.

According to the Times, Mark Kantrowitz, publisher of edvisors.com, said, “The total outstanding student loan balance at graduation should be less than the annual starting salary, and ideally a lot less.” If you can’t tell, repaying my loans wasn’t looking great at that point.

I would have had to earn $28,155 a year for my total student loan payments to be less than 20 percent of my discretionary income, which is the ideal.

This probably comes as no surprise, now that you understand my former situation, but I couldn’t make the monthly payments on my loans with my measly salary, so I ended up requesting an economic hardship deferment for my student loans. The deferment was granted. It gave me some time to get on my feet before I had to start paying my loans. Meanwhile the interest continued to accumulate.

According to the Times calculator, the average graduate from my alma mater now has $29,126 in student loan debt. That gives them a 10-year term monthly payment of $304.11. Borrowers would need to earn $35,752 or more in order for the loans to be no more than one-fifth of their income, the calculator said.

Try out the student loan calculator here.

Share your comments about it below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
How to Buy a Refrigerator, Step by Step
How to Buy a Refrigerator, Step by Step

Here’s how I got the perfect appliance at the perfect price.

16 Products You Absolutely Do Not Need
16 Products You Absolutely Do Not Need

There are plenty of great ways to spend your money, but you can safely leave these products on the store shelf.

14 Service Providers Most Likely to Lower Your Bill If You Ask
14 Service Providers Most Likely to Lower Your Bill If You Ask

With these companies, it might be easier than you think to negotiate your monthly bill down.

17 Amazon Finds Under $20 That Will Organize Your Life
17 Amazon Finds Under $20 That Will Organize Your Life

We’ve rounded up must-have products to help you get your ducks in a row.

These 5 Laptops Have the Best Battery Life
These 5 Laptops Have the Best Battery Life

Need a laptop that runs as long as you do? Check out these models.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

11 Things Retirees Should Always Buy at Costco
11 Things Retirees Should Always Buy at Costco

This leader in bulk shopping is a great place to find discounts in the fixed-income years.

Over 50? The CDC Says You Need These 4 Vaccines
Over 50? The CDC Says You Need These 4 Vaccines

Fall is the time to schedule vaccines that can keep you healthy — and even save your life.

Why Cloth Masks May Increase Your Coronavirus Risk
Why Cloth Masks May Increase Your Coronavirus Risk

A new study finds that wearing a cloth mask can backfire if you don’t clean it properly.

11 Household Items That Go Bad — or Become Dangerous
11 Household Items That Go Bad — or Become Dangerous

When you get the impulse to stockpile these everyday items, pay close attention to their expiration dates.

8 Things You Can Get for Free at Pharmacies
8 Things You Can Get for Free at Pharmacies

In this age of higher-priced drugs and complex health care systems, a trip to the pharmacy can spark worry. Freebies sure do help.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

These Are the 4 Best Medicare Advantage Plans for 2020
These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

The 15 Worst States for Retirees in 2020
The 15 Worst States for Retirees in 2020

Based on dozens of metrics tied to affordability, quality of life and health care, these are not ideal places to spend retirement.

The 10 Most Commonly Stolen Vehicles in America
The 10 Most Commonly Stolen Vehicles in America

A new model parks atop the list of vehicles that thieves love to pilfer.

This Is the Cheapest Place to Buy a Used Car
This Is the Cheapest Place to Buy a Used Car

Looking for a good deal on a set of wheels? This should be your first stop.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

5 Keys to Making Your Car Last for 200,000 Miles
5 Keys to Making Your Car Last for 200,000 Miles

Pushing your car to 200,000 miles — and beyond — can save you piles of cash. Here’s how to get there.

26 States That Do Not Tax Social Security Income
26 States That Do Not Tax Social Security Income

These states won’t tax any of your Social Security income — and in some cases, other types of retirement income.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

10 Reasons Why You Should Actually Retire at 62
10 Reasons Why You Should Actually Retire at 62

If you can, here are several good reasons to retire earlier than we’re told to.

7 Surprising Features That Boost Your Home Value
7 Surprising Features That Boost Your Home Value

You can add value to your home without hiring a contractor to do expensive renovations.

5 Things That Make Life More Meaningful for Retirees
5 Things That Make Life More Meaningful for Retirees

Retirees agree: These are the things that give them purpose and fulfillment in their golden years.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.