Regardless of the level of credential they earned or type of institution they attended, an overpowering impact is what student loan debt is having on the spending habits and the everyday lives of young people in the United States. Provided you finance it with your own money, college education is the gateway to a bright career and a handsome salary for the rest of your life. However, if you borrow money for your college education, you may not get to experience the latter.
According to LIMRA, an association of financial services and insurance companies, by the time you retire, student loan can cut more than $300,000 from your retirement savings. In the past two decades, student loan debt has increased significantly. Twenty years ago, the average student loan debt was a little under $13,000. Today, it stands at over $30,000. To find out how student loan debt affects the lives of students, a survey was carried out recently. The purpose of the survey was finding out the personal, emotional, and financial stress caused to graduates by the debt. The survey included over thousand graduates. The results of the survey showed that student loan causes stress and prevents graduates from pursuing their dreams.
The majority of the surveyed graduates said that the debt affected their ability to save for retirement. Other things affected by student loan debt included:
- Taking a vacation
- Mortgaging a home
- Dining out even on a fortnightly basis
- Buying a car
- Getting married
- Starting a family
- Paying daily expenses
- Starting a business
In addition to the aforementioned things, student loan debt was a source of embarrassment for more than 50% of the surveyed graduates. Moreover, the debt impacted the job choices of more than 40% of the graduates. Finally, over 30% of the surveyed individuals said that student loan debt had affected their ability to be social.
For many college graduates, debt is a source of pain. Today, an increasing number of graduates are finding it difficult to pay their loan on time. Over the past decade, negligence on student loans has increased dramatically. In 2005, of all the people in the U.S who had taken student loan, only 7% showed negligence on the loan. In 2015, almost 15% of the graduates with student loan were a minimum of 90 days late on payments.
While student debt can affect you in the aforementioned ways, it is far from being bad. Paying your debt on time will help you to build your credit. Your credit scores will get better as you pay down the debt. To find out how student loan is affecting your credit, request the relevant bureau for a copy of your annual credit reports. Also, you can search your credit scores online to find out how you’re doing in categories such as payment history. In case you’re behind payments, there are many ways for you to get back on track. In short, student loan debt can affect your life but only if you allow that to happen.