The significant issue of student loan debt, totaling $1.6 trillion, is having a substantial impact on the lives of millions of Americans.
Regularly, new and concerning statistics about student debt are released. So, how is this economic situation affecting the daily lives of recent college graduates from the millennial generation?
Student loan debt presents various challenges. Primarily, this massive debt is a major obstacle to millennials owning homes. If you notice young adults delaying moving out of their parents’ homes well into their late twenties or thirties, this is likely a key reason. A study by LendingTree revealed that student loan debt is preventing millennials from pursuing opportunities such as traveling, changing residences, switching careers, or starting families. The study also discovered that 46% of respondents regretted the amount they borrowed and 46% regretted their choice of college major.
While not all recent college graduates are currently facing severe financial hardships, a significant number – nearly 78% – stated that their student loan debt is restricting their lives, according to the LendingTree study. In terms of making financial sacrifices to manage their student loan debt, 44% are cutting back on travel, and 31% are postponing saving for retirement. Additionally, 46% of recent graduates currently owe more in student loans than they earn in salary, while only 51% have a salary higher than their debt.
The financial constraints placed on college graduates in the US are impacting various aspects of the country, from demographics and GDP to charitable giving. The survey revealed that 18% of respondents are forgoing donating to charitable causes in order to allocate funds towards student loan payments. Recent graduates are making cutbacks in several areas, including social outings, investments, relocation, career changes, further education, entrepreneurship, and starting families.
