When a person graduates college, it’s the beginning of a new life for them. A college degree is meant to allow young adults the opportunity to start off life in the right direction. That’s why we spend a lot of time studying, testing, and working hard to get to that level. The problem is, student loans are setting them back rather than propelling them forward.
For a lot of graduates, a college degree isn’t what it used to be. In fact, a new study conducted by the American Youth Association and AARP found that student loans are crippling young people in the crux of their life. Millennials are being hit the hardest with debt that prevents them from saving money for huge milestones.
Imagine having to pay anywhere from $400 to $1,000 each month to keep compliant with loan repayment. It can be nearly as high as a mortgage, not including other expenses, like the electric bill, phone bill, and rent. Even if millennials do find meaningful work right after graduation, it’s rarely enough to overcome the payments and afford everyday life.
AARP Study on Student Loans
According to the AARP study, this problem is hitting millennials more than any other age group. Nearly half of all millennials (48%), are struggling under the burden of student loan debt. Only 34% of Gen Xers and 12% of Baby Boomers have this problem. A lot of it has to do with millennials living through the Great Recession and the cost of college rising dramatically.
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Because the cost of going to college has risen so significantly over the last decade, more people are forced to take out student loans to pay for it. The worst part is, they’re saddled with this debt for the next decade or two. Some repayment plans take 25 years to complete. How can they save for retirement or buy a house?
The Burden Isn’t Just on Students
If you have a full generation of adults coming up now where half of them can’t afford to move out of their parent’s home, that impacts the economy greatly. Research already is showing that this generation is delaying marriage, having kids later in life, and are waiting longer to buy a home. They simply can’t afford to survive by themselves in today’s economic climate.
“The student loan problem is rippling across the broader economy,” says Ben Brown, founder of the Association of Young Americans. “As people both young and old continue to graduate with more debt, that ripple effect will become wider and more significant. This highlights the importance of solving both the extreme cost of higher education as well as the $1.5 trillion student debt crisis.”
LendEDU conducted a survey and found that 75% of Millennials feel daily stress about their student loans. It’s going to set a precedent for future generations who may decide that college is not for them. We’re already seeing fewer people are applying to college, but the cost is still going up.
Making Better Decisions
If you don’t want to take on extreme debt at an early age, there are options. Future generations are going to have to make a better decision when it comes to where they go to school. Don’t fall for the schools that promise job placement right after you graduate. Most of those claims are controversial and are even found to be fraudulent.
Also, rather than going to an Ivy League school, opt for a getting your undergraduate degree closer to home. Go to a community college for the first few years. Save up for the rest. Choose a school that’s a better financial fit for you, not the big school with the huge cost. In the end, you’ll find it’s not worth paying off a loan for the next two decades after graduation.
