Young Adults Delaying Major Life, Career Decisions Because of Student Debt
Quick Takeaways:
- A new survey from American Student Assistance (ASA) found that a majority of young adults with student debt find it difficult to make large purchases, such as a car or home, because of their debt.
- Student debt is also impacting their ability to save for retirement, make long-term financial investments, and choose a career field.
- Policymakers and stakeholders must do more to mitigate the negative impact of student loan debt, including increasing grant aid at all funding levels and improving consumer information for borrowers and their families.
By Brittany Hackett, Communications Staff
Student debt continues to impact the decisions borrowers make regarding their careers, families, and long-term purchasing and saving decisions, according to a new survey from American Student Assistance (ASA).
While many student loan borrowers are able to repay their loans and manage their debt without much difficulty, “the mere existence of the debt is a burden that is impacting the way student borrowers make important lifestyle decisions,” which has a “cascading impact on the nation’s economy,” according to ASA.
According to the survey, young adults feel hindered by student loan debt when it comes to achieving financial success and making major purchases, such as buying a car or purchasing a home. Thirty-five percent of survey respondents said their student debt made it difficult to purchase daily necessities and 52 percent said it impacted their ability to make larger purchases like a car. A majority of borrowers – 62 percent – said they were putting off saving for retirement or making other investments because of their student debt, while 55 percent said their debt is impacting their decision or ability to purchase a home.
Other major life decisions, such a starting a family or choosing a career, are also impacted by student debt, according to the ASA survey. Twenty-eight percent of survey respondents cited student debt as a reason for delaying starting a family, and 21 percent said it was the reason they delayed getting married.
In addition, 53 percent of survey respondents said that their student debt was a deciding factor or had considerable impact on their choice of career field, while 47 percent said they strongly or somewhat agree with the statement that the “need to pay student loan debt is hampering my ability to further my career.” Sixty-one percent of survey respondents who were interested in starting a small business said that their student debt impacted their ability to do so.
Based on the results of the survey, ASA made several recommendations for ways federal and state policymakers, higher education institutions, loan servicers, and students and families can limit the negative financial impacts of student loan debt. Overall, the recommendations focus on:
- Controlling rising higher education costs associated with tuition and fees;
- Expanding grant aid from federal and state governments, as well as private entities;
- Keeping federal student loan interest rates low;
- Expanding flexible repayment for private student loans; and
- Providing better consumer information about borrowing and student loans to help students and families make better consumer choices about higher education.
Publication Date: 1/25/2016
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