Former University of Michigan student Debbie Ardemendo says the $150 college loan payment she makes each month does not even cover the interest on the $73,000 she owes on her education.
Ardemendo says her salary at a New York museum is so low she can’t afford to pay more. As a result, the principle amount she owes continues to grow month by month–long after she graduated.
Ardemendo was one of several former students discussing the financial plight of recent grads with heavy education debt at a recent press briefing on 529 college savings plans organized by AllianceBernstein L.P., New York, a unit of Allianz S.E., Munich.
AllianceBernstein’s survey of recent grads with college loans found 74% report difficulty paying off this debt, said Jennifer DeLong, director of college savings plans at the firm’s retail asset-management arm.
In part because of the loan burden, 42% of the survey participants said they live from paycheck to paycheck, 32% said they have had to move back with parents and 44% said they have delayed buying a home, DeLong said.
Another speaker said financial advisors must push clients harder to save for their children’s education, even if it’s just a small amount each month.
But some advisors don’t even want to bring up college savings plans with clients, said the speaker, Paul Donas, a broker-dealer with John Hancock Life Insurance Company, Boston, a unit of Manulife Financial Corp., Toronto.
Advisors too often are focused on selling other products that are more profitable or easier to understand, Donas said.
To get parents started toward a college savings program, the advisor can help the parent find the money.