SALT LAKE CITY — The bad news came when Mike Long arrived at the halfway point of a 10-year program to get his student loans forgiven.

“It was disappointing and frustrating,” Long said. “I missed out on five years.”

He discovered that since his federal loans weren’t consolidated, he had to start over with the required 120 monthly payments to qualify for the Public Service Loan Forgiveness Program.

“It’s confusing,” he said. “I should have done a better job of checking those boxes and making sure everything was in place.”

He now checks every year to make sure his payments are being applied correctly, but he’s still left feeling uncertain if his nearly $60,000 in student loans will ever be paid off.

“Who knows if that program will even be around?” he said about the program that is known for rejecting applicants. “Maybe I’ll get to seven, eight years, and what if it goes away? I’m just crossing my fingers.”

Skyrocketing debt

Long graduated a decade ago from Brigham Young University with a law degree and master’s degree. He’s been paying down student debt ever since, but the balance doesn’t budge.

“I just have to keep paying,” he said. “Interest continues to accrue on those loans, so it doesn’t really make a dent in the total amount.”

The loans were necessary, he said — an investment in his future. Even so, he urges caution to the students of today.

“Look closely at those things before you’re signing for a loan, thinking, ‘Oh, I’ll pay this back. I’ll get this high-paying job,’” he said in an interview with KSL. “You don’t know what the future holds.”

Americans now owe a staggering $1.5 trillion in education loans, according to the Federal Reserve. The average student carries a loan balance of $37,000.

“It’s a significant amount of debt, and it really is saddling people with kind of a lifetime of struggle,” said Robert Spendlove, the senior economist for Zions Bank. “Once you take it on, it’s going to be with you for a long time.”

Signs of trouble

Spendlove said the debt burden from education is putting homeownership into jeopardy for many millennials in Utah.

“I think the student loan problem could be our next debt crisis,” he said. “Student loan debt is very difficult to dismiss in bankruptcy.”

During the recession, people went back to school. In the decade since, student loan debt shot up more than 170% — far outpacing increases in credit cards, mortgages and car loans.

“It’s now the second-largest source of household debt — right after mortgage debt,” Spendlove said. “Imagine going into retirement and still having student loans to pay.”

More evidence of looming trouble: The latest report from the Federal Reserve Bank of New York shows nearly 11% of student loans are more than 90 days delinquent.

There is good news when it comes to Utah. A recent analysis by WalletHub found the Beehive State leads the nation when it comes to the least amount of student debt. Not only does Utah have the lowest proportion of students with debt, but it also has the lowest average loan amount.

Limit borrowing

To limit borrowing, Utah families should prepare while students are still in grade school and high school.

“Talk about college around the dinner table early and often,” said Melanie Heath, an assistant commissioner with the Utah System of Higher Education.

Utah’s My529 college savings plan is a good place to start, Heath said. The nonprofit plan offers tax benefits and is highly rated because of its low fees and investment options.

Students can also take advantage of Utah’s robust system of concurrent enrollment to earn college credits while still in high school.

“It’s $5 a credit, so it’s a screaming deal in Utah,” Heath said. “Every student could get college credit in high school and really should.”

During the 2017-18 school year, Utah high school students earned nearly 270,000 credits, saving them $48.7 million in future tuition expenses, according to the Utah State Board of Education.

In fact, it’s possible to graduate high school with a general education certificate that’s transferable to all of Utah’s public colleges and universities. It meets the lower-division general education requirements for an associate or bachelor’s degree.

Graduating debt free

By using concurrent enrollment, Willie Petersen graduated from high school with more than 45 college credits.

“That checks out at like three or four semesters of school done before I’d even set foot on a campus,” he said.

It easily saved him tens of thousands of dollars in tuition and gave him confidence.

“One of my goals as a high school student is that I really wanted to be able to go to college and not have my parents pay for it,” Petersen said. “It’s a complete relief to be able to graduate without that looming cloud of student debt.”

Petersen graduated debt-free from the University of Utah with his bachelor’s and saved enough during those undergraduate years to pay for the graduate degree he’s currently working on.

“More so than a relief,” he added, “it’s a feeling of accomplishment.”

He encourages students to enroll it at least one concurrent enrollment class early on in high school. Besides the financial savings, he says concurrent enrollment can help a student decide what major to choose in college.

“Every credit that you earn from high school is one less credit you have to take at a university,” Petersen said, “one less credit that you have to pay for.”

Student aid

For those already in college, the No. 1 way to reduce borrowing is to apply for scholarships and financial aid.

“We know in Utah we leave about $40 million in free money for college on the table every year,” Heath said. “$40 million goes a really long way.”

Utah is dead last when it comes filling out the Free Application for Federal Student Aid, or FAFSA. Last year, 55% of Utah high school graduates didn’t complete it, according to NerdWallet.

Filling out the FAFSA form is the only way to get a Pell Grant — a tuition subsidy that does not need to be paid back. Many scholarships also require that the FAFSA form be submitted.

For the 2019-20 school year, the maximum a student can receive through a Pell Grant is $6,195.

Other options to avoid borrowing include “cash-flowing” your college education by working and paying as you go, completing classes at a less expensive community college, or going to a trade school.

Repayment tips

If you’re among the millions working to pay off student loan debt, first make sure you know how much you owe and the details of your loans.

• Consolidate multiple loans into one loan with one payment.
• Refinance to get a lower rate (just make sure to avoid loan origination fees.)
• If you can afford it, make extra payments every month — this will take years off the loan and save in interest.
• Check if your employer offers any loan repayment programs.
• Investigate all programs that forgive your loans for working in certain industries or geographical areas.

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