We often hear about the student debt crisis in terms of how it’s affecting recent graduates. As if it isn’t challenging enough to deal with applying for and interviewing for jobs, those freshly out of college soon start receiving student loan bills after a certain grace period.
But the truth is this kind of debt is capable of affecting Americans of all ages — and there’s plenty of research to prove it.
People with Student Loan Debt Feel Extra Stress
Debt in general can cause stress. But studies have shown student loan debt leads the pack, causing borrowers more stress than any other type. As The Motley Fool reports, a recent poll from Morning Consult found 64 percent of adults feel “some, or a lot of stress” about student loans — more than credit card debt (60 percent), mortgages (42 percent) and auto loans (42 percent).
Student debt also came out on top as being “a major cause of concern,” again beating out other types of loans.
Any source of extra stress can have effects on mental health and physical health — especially in terms of sleep, heart health, and potentially harmful escapist behaviors like drinking and smoking. Plus, it’s just downright unpleasant, as anyone who’s ever worried about money will tell you.
It Causes Borrowers to Delay Life Milestones & Forego Saving
Members of past generations could buy homes, get married, and have children without having to factor in massive education debt. However, carriers of contemporary student loans often have to choose between achieving these milestones and servicing their monthly debt payments. As a result, many graduates find themselves putting off life events — no matter how much they’d like to partake — because their debts have to take first priority.
Bankrate breaks down how student loan debt is affecting borrowers’ behaviors:
- About one-third (34 percent) are delaying contributing to emergency savings.
- Approximately 29 percent are putting off saving for retirement and 27 percent are foregoing paying off credit card debt.
- Nearly one-fourth (23 percent) are holding off on buying a house.
- Again, 23 percent are delaying financing or leasing a vehicle.
- About one in 10 are putting off having kids and getting married.
The Cost of College Today Affects Parents, Too
Students aren’t the only ones directly affected by college-related expenses — which have been on the rise for the past few decades. Parents also feel the pinch as many try to help their children shoulder some of the burdens of paying for college. A recent survey from Freedom Debt Relief explored the effect of student loan debt on not just students, but also their parents.
As debt expert and Freedom Debt Relief co-founder Andrew Housser recently cited in a tweet, one-third of survey participants said they “can’t save any money” due to the cost of their child’s education. One-fifth of parents surveyed said their child’s high educational costs have caused them to lose sleep, as well as affected their mental/emotional health.
Another concern is that over 40 percent of parents say expenses associated with their child’s higher education have affected their retirement plans. Some are postponing retirement as they have had to reduce or eliminate their efforts to save for it.
The fewer Americans are saving for the short and long terms, the more precarious their financial situations become. This is why it’s fair to say student loan debt has reached a crisis point for borrowers and their families. The day is coming when we’ll have to reckon with the more than $1.6 trillion in outstanding student loans to preserve the health, happiness, and prosperity of Americans.