Cover that College Debt

It's June, and there is another crop of college graduates starting their first job out of school.  A recent article from the Pew Research Center states that among households headed by someone younger than 35, a record 40% had student loan debt outstanding.  The average student loan balance outstanding for the graduating class of 2013 was $35,200, according to a new study from Fidelity, but 10% of student debtors owed more than $61,894.  Students leaving college upon graduation today have the highest debt level they've ever had. 
Any new College Graduates:  Cover the debts you have with life insurance.  A $50,000 life policy could run less than a dollar a day.  A $100,000 policy will run less than $10 per week.  This will give you as a college grad, a base of permanent life insurance coverage. 
And to the Parents of recent high school graduates:  As your kids head off to college in the fall think that they will be the ones that will have to deal with the increasing cost of college education.  It is likely that their college education could cost $100,000 or more over a four or five year period.  Much of that cost will be paid through student loans.


With a purchase of a term life insurance plan, all this debt can be covered, and the student can start to build a base of life insurance coverage for latter after graduation. 
In one sense this is protection for the parents.  The parents are the ones that will be ultimately responsible for paying off the student loans if something unexpected happens to the student because the parents are generally required to co-sign for the loans.  Covering the debt with life insurance makes sense. 
Term insurance would be an obvious choice in this situation because it provides the coverage needed at the lowest out-of-pocket cost.  A $200,000, 20 year level term on an 18 year old male would run about $18.53 per month with Waiver of Premium included.  The parent can pay the premium while the student is in school, then turn the policy over to him or her after graduation.