student loan debt
Money borrowed to finance education that must be repaid with interest.
Example
“Student loan debt of $85,000 consumed 20% of her monthly take-home pay for a decade.”
Memory Tip
STUDENT LOAN DEBT — often the first major debt of adult life, and the longest lasting.
Why It Matters
Student loan debt significantly impacts your financial health and future decisions like buying a home, starting a business, or saving for retirement. Understanding how much you owe and the terms of repayment helps you create a realistic budget and plan for long-term financial stability.
Common Misconception
Many people believe that student loans will be forgiven after a certain number of years, but in reality most loans require active repayment for 10 to 25 years depending on the plan chosen. Forgiveness programs exist but require meeting specific eligibility criteria and making consistent on-time payments.
In Practice
A graduate with 40,000 dollars in federal student loans at 5 percent interest using a standard 10-year repayment plan will pay approximately 424 dollars per month, totaling roughly 50,900 dollars by the end of repayment. If they switch to an income-driven plan earning 35,000 dollars annually, their monthly payment might drop to 150 dollars, though they could pay more interest over a longer 20 to 25 year period.
Etymology
From Latin 'studere' meaning to study plus Latin 'debitum' meaning owed.
Common Misspellings
Compare debt consolidation options
Related Terms
More in debt
Other debt terms you should know
See Also
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