More than 45 million Americans collectively owe more than $1.7 trillion in student debt.
Economists say this growing total is worsening generational inequalities, slowing economic growth and exacerbating racial disparities. At the micro level, borrowers also face serious consequences in their daily lives.
According to CNBC + Acorn recently published Invest in Yourself Student Loan Survey conducted by Momentive, 81% of people with a student loan say they had to delay one or more key milestones in their life because of their debt. Momentive surveyed 5,162 American adults between January 10 and January 13 online to better understand the impact of student debt.
The survey found that among student borrowers, 42% delay repayment of other loans, 40% delay investment, 38% delay saving for retirement, 35% delay travel, 33% delay purchase a house, 16% delay the birth of a baby, 14% delay marriage and 12% delay finding a new job.
“Student debt prevents the formation of a family, it prevents people from making decisions about their lives, from buying a house, from buying their first car, from getting married, from having children”, lists Nicole Smith, chief economist at the Georgetown University Center on Education and the Workforce. “And that wasn’t the point of student loan debt. Student loan debt was supposed to be good debt – the kind you incur so you can invest in building your human capital so you can live your life by the sequel – and it turned into something much more insidious.”
Momentive researchers found that the most common sacrifices made by borrowers varied slightly by age. For example, people aged 35 to 64 were the most likely to delay repaying other loans, while borrowers under 35 were the most likely to delay buying a home or investing. .
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“The weight of student loans is a cloud hanging over every financial decision, from your daily coffee to your big life decisions,” says Braxton Brewington, press officer for The Debt Collective, a labor organization that represents students in debt. “So many people say they would start a business if they didn’t have student debt. So many people delay marriage because they don’t want their partner to take on the debt.”
Brewington says he’s even spoken with borrowers who rationed drugs because of their student loan burden.
This dynamic in which student borrowers cannot save for the future or for emergencies makes society less stable, Smith says.
Paying off student debt “first affects your ability to get the standard things that are often needed to transition into adulthood: a house, a car, and a family,” she says. “That’s what happens immediately. But at the end of the day…you often end up living on the razor’s edge. the risk of bankruptcy.
And for many people hoping to compete in the modern economy, going to college and incurring student debt may seem inevitable.