With Spring in the air, now more than ever, students and their families are beginning to pursue their options for college and receive their acceptance letters. It’s an exciting time for many, filled with opportunity as well as the weight of deciding their future.
But while most may be comparing how one class docket may better help their career choice, or campus better serve their social life, sadly few consider how the resulting student debt may actually hurt their future, rather than help it.
It’s a problem many politicians are doing little to correct and that your parents may not understand, but the statistics don’t lie: student debt is rampant in the US.
And according to the latest studies, it’s causing delays in major life monuments for Millennials.
For the 3 out of 4 students in our nation’s education system, aged 23-28, who put off a financial or life milestone because their student debt was too much to handle, this is a big deal – a reported delay of:
- 31% from buying a home;
- 38% in saving for emergencies;
- 28% from purchasing a car;
- 28% from paying off other debts, such as credit cards;
- 25% in retirement savings;
- 19% from having kids;
- 17% from getting married; and an additional
- 4% listing student debt as an active reason for generally hindering their life.
From our grandparents, to society in general, there’s always been a push to attend a prestigious 4-year college immediately after high school. No one will deny that university is an important part in a person’s life, while often crucial to secure many intensive careers down the road. But while the workforce is beginning to evolve to make college less of a necessary staple, the cost in student loans continues to rise to a staggering $1.5 trillion in nationwide debt.
It’s a new problem, and as such, not many can exactly understand or relate with it.
For Baby Boomers, aged 55-73, very few ever experienced student debt to begin with – a slight 24% when compared to the Millennial average of 39%. And for those who did have a student loan? 50% said that it didn’t impede their life much, whereas 73% of Millennials claim the debt was so bad it delayed a major life event.
If you really dig into our education system, it’s easy to see how student debt became the expense it is now – but where does that leave us?
As hindsight is 20/20, when surveyed over what Millennials drowning under student debt would do differently:
- 34% would have applied for more scholarships;
- 25% would have gone to a cheaper college;
- 24% would have attended a trade school or community college, rather than a 4-year;
- 23% would have changed their majors to something that required less schooling; and
- 9% would have not gone to university at all.
The bottom line?
”Many families are now striking out to investigate college campuses as they begin studies this fall,” summarizes Mark Hamrick, the Senior Economic Analyst for Bankrate.com. “For those prospective students and their families, many of who will help them to pay for their secondary education, we’d urge them to investigate all possible options for financial aid including scholarships to limit their borrowing… Their options also include attending a lower-cost school such as those in-state as well as more economical trade schools and community colleges.”
One of my business contacts runs an organization called the Financial Aid Workshop. If you need tips or advice, check out her information at https://www.facebook.com/thefinancialaidshop/ or https://www.thefinancialaidshop.com/