Recently, we’ve been tackling different perspectives on student debt. We had an interview with a soon-to-be grad, who faces paying back $50,000 in student loans, and wrote about how recent grads are faring in the workforce, detailing 5 different stories from real-life recent grads. We also addressed the media’s treatment of millennials, and how to stay financially fit during college. One of the things we stressed in that article was to take on student loans as a last resort, and now, post grads still paying off their loans would probably agree with us.
Viewed collectively, student debt is another expense on top of all the standard fixed expenses — housing, food, transportation. It’s one more chunk of money that has to be set aside every month. For that reason, student loan borrowers, who are well into their adult years, are putting off spending, saving, and marriage.
The American Institute of CPAs conducted a survey among 200 people, and this is what they discovered:
- 41% said they have delayed saving for retirement.
- 40% have put off purchasing a car.
- 29% have postponed home purchases.
- 15% said they have even put marriage on hold, delaying tying the knot due to student debt.
- 60% revealed they feel some amount of regret about the decision to fund their education through student loans.
So what exactly does living with debt mean? It means dealing with incredible pressure to make constant and consistent payments, often for years, with dire consequences for the borrower who fails to make payments. This financial pressure can force a recent grad into a taking a low-paying job (possibly not requiring a 4-year degree), just to pay the bills. Studies are showing that 50% of recent grads are currently unemployed or underemployed, so this scenario is actually very common.
Student debt is slowing the progression and personal development of today’s graduates. With such high college costs, sometimes taking on a student loan is unavoidable. However, it’s important to note sacrifices that have to be made in order to pay off those loans. (Continued on page 2)