Who's Making the Fastest Progress on Student Loans? We Break It Down By Major
You might think going into a high-powered profession like law or medicine would guarantee that you'd pay down your student debt quicker than most. But — according to our recent Payback Progress survey — you'd be wrong.
So who's winning the loan payback game? Get ready to be surprised.
Who's paying off the fastest
While magazines and newspapers have been shutting their doors and laying off reporters at an alarming rate in recent years, college graduates who majored in journalism and broadcasting are pounding away at their student debt.
At the time of our survey, most people with this major paid off an average of 55% of their debt. A little comparison? Lawyers had paid off 25%.
So why are journalists winning at the loan payoff game?
Analyzing the behaviors and drivers of an entire industry is risky, but we have a few theories:
1. Lower salary expectations
The career industries with the highest student loan payoff rates (journalism and broadcasting, publishing, and construction) aren't known for super high salaries. These graduates are less likely to rely on a future raise or bonus to bring them the windfall that will help them pay off their loans.
Instead, they're executing on a consistent plan to pay off as much as they can as quickly as possible.
See also: Paying Off Student Loans.
2. Less loan forgiveness
The industries at the top of the leaderboard are less likely to rely on loan forgiveness programs as a means of reducing their student loan debt.
In comparison, those in the education field — who have only paid off 23% of their student loans, according to the survey — may be paying less in anticipation of future loan forgiveness.
3. Fewer post-graduate expenses
Positions in journalism or construction rarely require a post-graduate degree.
So professionals pursuing those careers are able to focus on paying off their loans right away rather than deferring loan payments while they take out more loans for further education.
4. Smaller loan amounts
Those who've paid off higher percentages of their loans tend to have started with relatively small loan amounts in comparison to some other industries. For instance, on average those in the journalism and broadcasting industries graduated with $27,000 in debt, whereas those in the medical and healthcare industries graduated with $43,000 in debt.
Perhaps the task of tackling a larger amount of debt creates a bit of paralysis for some graduates.
Who's paying off the slowest
If journalists are paying off their loans the fastest, who's bringing up the rear?
Not surprisingly, those who are unemployed have the lowest payoff rate — at 9%. Making progress on your student loans is difficult for most graduates, and even more so if you don't have a steady income coming in.
But those in the telecommunications and scientific industries have paid off only slightly more — at 13% and 16%, respectively. And graduates in the legal and health care fields are in the bottom third, having paid off 25% and 20%, respectively.
So what's keeping the bottom payers from making more headway on their student loans?
1. Additional education costs
Lawyers, scientists, and many in the medical field (not just doctors) are all likely to need post-graduate degrees before finding employment.
Adding another $100,000 (or more) onto existing student loan debt is a sure way to slow down the payback clock, especially if your loans are in deferment while you're in graduate school.
2. Student loan forgiveness
Many student loan forgiveness programs, like the Public Service Loan Forgiveness program, cater to those in the medical profession or people working in government or public service positions.
Graduates relying on those programs are less likely to make paying off their debts a priority since whatever they don't pay will be forgiven at some future date.
3. Plans for future earnings
Long residencies or low-paying government or associate positions may prompt some doctors or lawyers to pay the minimum for a time as they look toward higher salaries in the future.
If you're expecting your salary to double in five or six years, you may have less incentive to double down on payments now.
4. Debt paralysis
Staring down almost $50,000 in loans (or quadruple that if you've taken out post-graduate loans) can leave some borrowers feeling so overwhelmed that they quit trying to make substantial progress. Instead, they pay the minimum and accept that they'll be managing a monthly student loan payment until they retire — and maybe beyond.
Making meaningful headway on your student loans is possible, regardless of your industry. Learn from those who have made serious progress by prioritizing their financial freedom.
Wondering about the best method for paying off your student loans faster? Refinance for a lower interest rate and you could potentially shave years off your payments.