Students With Smaller Debts Have a Harder Time Paying Back. Here’s Why.

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First, some good news — just by finishing your degree program, you’re improving your chances of paying off your debt in full:

Defaults are concentrated among the millions of students who drop out without a degree, and they tend to have smaller debts. That is where the serious problem with student debt is. Students who attended a two- or four-year college without earning a degree are struggling to find well-paying work to pay off the debt they accumulated.

And there’s more good news — if you’re borrowing over $50,000 (and in a graduate program), the odds that you’ll pay back your loan are higher than any single other group. That’s because, on average, you’re earning more than double your pay rate in 1964 for the same job (after adjusting for inflation).

The fact is, even a tiny amount of debt — less than $10,000 — is crippling in this economy unless you have a graduate degree. And it’s near impossible to pay back without an undergraduate degree. Read the rest of the findings on the current state of student loan defaults at the New York Times.

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