Paying for health insurance vs paying student loans | Get Smart Get ...

What if you had to choose between paying your student loans or having health insurance?

Student loans are getting a lot of attention in the news lately. Interest rates on many federally subsidized student loans are set to double from 3.4% to 6.8% as of July 1, 2012 ? unless American lawmakers do something about it soon.

According to some estimates, as many as 8 million current and former students could be affected by the hike in interest rates. And the average debt burden for people with student loans is over $25,000 at graduation.

What students and grads are saying about student loans

In our annual survey of college students and recent grads we asked some questions about student loans and confirmed that there?s a lot of anxiety around the issue. We also asked respondents how they would prioritize health insurance and student loans, if forced to make a choice.

Here?s what they said:

• Among those with student loans, 58% of current students and 62% of recent grads are afraid they won?t be able to pay their student loans at some point while in their twenties

• Nearly three-quarters of students (72%) and grads (75%) with loans would rather go without health insurance than default on their student loans

Anecdotally, eHealthInsurance customers in this situation have told us that their primary concern is to maintain a good credit score.

Limiting your exposure to medical costs

What happens to your credit score and future financial prospects when you do get seriously sick or injured and end up with a $50,000 hospital bill that you can?t afford to pay? Even young adults with high-deductible health insurance plans can end up with bills too big for their budgets.

One hedge against out-of-control medical costs is accident or critical illness insurance. These products don?t provide health insurance as such, but they can provide an extra layer of protection.

If you have a serious injury or are diagnosed with a condition covered under the plan, the insurer will pay a cash benefit directly to you. You can use that money to help cover insurance deductibles, medical costs, or basic living expenses.

Want More Survey Results?

Visit our Media Center to learn more about eHealthInsurance?s 2012 College Students and Grads Survey, conducted by Kelton Research.

Image by Flickr user Rodney Martin

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