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The Contract Is For $43,950 and Counting!

The Iowa College Student Aid Commission issued a report (Oct 2007) that shows the average college student debt upon graduation to be $24,990.

According to their brochure, Exit Counseling: Your Guide to Successful Repayment, the maximum feasible (affordable) level of debt repayment is 8.0% of a graduates starting salary.

Question: Assuming a loan repayment using a standard 10-year repayment schedule with 7.22% annual interest rate, what does the starting salary need to be for a new college graduate?

Note: A compounding factor is that college students also graduate with an additional average credit-card debt of $2,864.

Source: Fast Company, January 2008, p. 48