My children and I had a financial meeting on Saturday. We discussed their total student loan indebtedness, the interest rate they’re being charged, and best practices for dealing with their student loan servicers.
We also talked about the need to open up a savings account and save a percentage of their income–no matter how low it is.
We talked a bit about credit card debt and how credit scores are used, but not about auto or home loans–neither is looking to buy any property yet, and as New Yorkers they don’t need a car.
Debt Financing
But like that of most Americans, debt is most likely in my children’s future. How much debt? As it turns out, debt isn’t evenly distributed across degree holders. In fact, the higher your degree, the greater your debt load.
At least that’s according to a report by LendEDU, a marketplace for student loans and student loan refinancing. (Yes, that’s a thing. Look for a post soon.)
We’re not just talking about student loan debt. We’re talking about what could be called lifestyle debt–car loans, credit card debt, etc.
LendEDU reports that M.B.A.’s carry the most credit card debt and that doctor of pharmacy degree holders have the highest auto loans–a whopping $41,764.
Who carries the least credit card debt? LendEDU says associate degree holders, who carry a median $1,143 in revolving debt.
Of course, associate degree holders are likely to earn a lot less money than M.B.A.’s, who despite their debt load most likely have the earnings to manage it responsibly.
Auto Loans and Mortgages
Interestingly, bachelor degree holders actually hold the lowest amount of auto loan debt: $23,290–less than that of associate degree holders, who hold a median auto debt of $23,535.
M.B.A.’s have the largest home loans by far–$445,900; associate degree holders have relatively large mortgages as well–$164,225.
LendEDU examines the data just by degree; it would be interesting to overlay race and see how black degree holders measure up on the debt scale.
Which degree holders have the best overall credit score? Doctors of pharmacy have the best; associate degree holders, the worst.
For more, visit LendEDU.