As the Federal Reserve is expected to continue to raise interest rates and lower borrowing costs for borrowers in the years ahead, the number of student loans being issued and the cost of the loans has come under increasing scrutiny.
While the overall rate on new loans has been in the mid-single digits since 2008, the average annual rate has skyrocketed, hitting an all-time high in 2017 of 2.85 percent, according to a report from the Consumer Federation of America.
This has led to the growing demand for debt-free, adjustable-rate loans, which allow borrowers to make payments on an individual basis while paying the interest on the debt.
The cost of student loan debt is one of the biggest issues facing consumers in a country where the average household earns just $28,000 per year.
The median student loan balance is $25,000, according the report.
With student loans increasing at such a rapid rate, the cost to consumers of student debt is becoming increasingly a matter of concern.
The report says that more than half of American families currently owe at least $1,000 on their student loans, with nearly 1 in 5 owing $1 million or more.
While many borrowers are taking out loans to pay their tuition and fees at schools such as the University of Phoenix, others are taking on more debt to pay bills and other expenses.
The average annual loan balance for those borrowers is $29,000.
The CFA warns that many borrowers may be able to reduce their payments, even as they work toward the goals of paying off their debt.
This could put them at a disadvantage in the job market, because their monthly payments will be much higher than those of other Americans who are working longer hours, working less and struggling to pay the bills on time.
While students have been struggling to keep up with their loans, they have also been working to save up enough to pay off the debt, even if it means having to sell their homes and put aside additional funds to help cover their debts.
According to the CFA, the amount of debt that Americans have to pay in order to get by on a monthly basis has grown by $2.3 trillion over the past 30 years, an increase of more than 4 million jobs.
This is the equivalent of 1.6 million manufacturing jobs lost over the same time period.
While it is possible to save money and pay off student loans in the short term, this is not always possible.
Many borrowers may not have the ability to pay down their debt in the long run, especially in times of economic hardship.
The average cost of interest payments on student loans is about $25 per month, but there are exceptions.
These include income-driven repayment programs, which are designed to help borrowers with lower income to reduce debt loads and save up for a down payment, as well as certain types of adjustable-rated debt, which require borrowers to pay interest on their loans.
The Consumer Financial Protection Bureau (CFPB) says it has not yet issued any guidance on student loan interest rates, but said in a statement that it is “working with stakeholders to provide guidance for students who want to use alternative repayment options and are currently paying for their college education.”
In the meantime, the Consumer Financial Defense Fund (CDFF) says that if you are currently facing student loan payments on a regular basis, you should take steps to reduce your debt burden and pay down your student loans.
“Student loan borrowers who have the financial capacity to pay back their debt should work to refinance their debt, but in doing so, should be aware of the financial penalties associated with doing so,” the CFPB said in the statement.
“The CFPM has provided this information to help students with debt and interest rates to help them make informed choices about the best way to pay them off.”
This story was updated at 3:50 p.m. to include a statement from the CFOB.