x
Breaking News
More () »

Financial Fortune-Telling: Pay off student loans or plan for retirement?

College graduates getting their diplomas now will get more than just a piece of paper, they’ll get a record amount of student debt.

College graduates getting their diplomas now will get more than just a piece of paper, they'll get a record amount of student debt. That has new job seekers asking about debt relief benefits instead of a retirement plan.

The quiet walk to their next class on campus is now traded in for a job hunt.  Students will need that career, because of what's coming next.

Paying off loans is getting harder each year. The cost of college continues to jump, rising by just over $1,000 a year.  Augustana graduates  will average about $28,000 of debt. It's no wonder some students are now looking at their finances in a different way.

"I feel like taking care of myself now is my first priority. I haven't really thought about my 401k or my retirement plan," said Lara, an Augustana grad.

She isn't alone.

"Yep, get it all the time," financial advisor Phillip Kassewitz says when asked about whether people are talking with him about whether to focus on their student loans or retirement.

job listing

"On the surface, I don't think it's a great idea, but it's an idea that you have to take a look at," Kassewitz said.

Even students like Hadley Karrick, who is heading into a job with none of these benefits, knows that someday she'll need to face her debt.

"Yes, absolutely. I would ideally like to have my student debt gone or taken care of quickly and then worry about retirement," Karrick said.

Asking the question about student loan benefits could lead to some good news.

"It shows you there's an insight and there's responsibility," Schumacher Company COO Max Droste said.

It's a question that Droste wants to hear more often. He says talking to businesses about any kind of benefits sends employers a positive message.

woman on computer

Only about 3% of jobs across the country offer some kind of student debt relief program. That's projected to go up, but Kassewitz urges caution and balance.

"The fact of the matter is, you do want to have some money going into a 401k, especially if there is an employer match. You're leaving that money on the table," Kassewitz said.

"I think this is the cutting-edge generation which will continue until the dilemma is solved on how to manage college debt," Kassewitz said.

It's a new age of debt and how to make ends meet.

 

Before You Leave, Check This Out