Paying for College

Student Loan Debt: Consequences

I've preached (a.k.a. ranted) here about student loan debt for years. Some of you may have become immune to my blathering and no longer pay attention to my cautions. That's understandable but unfortunate in my view. The facts are apparent and easily found: National student loan debt reaches a bonkers $1.2 trillion.

That's $1,200,000,000,000. Put another way, that's about five percent of the U.S. national debt. A staggering figure.

What are the individual, personal, and practical consequences of such indebtedness? I did some research to find out and posted related information in a thread on the College Confidential discussion forum. It caused a bit of a stir.

First, let's take a look at some perspective:

Kyle Craig wants to go to graduate school, but just being an undergraduate is already drowning him in debt.

“I've got student loans just like everyone else walking around," says Craig, a senior at Old Dominion University. “I expect my debt to be around $30,000 by the time I'm done here."

“Yes, I have student loans," says Kyle Coghill, a junior at Old Dominion. “I'm a 22-year-old studying communications at a university. Of course I have them. I have absolutely no clue how long I'll be paying them off. I don't really want to think about that."

Craig and Coghill are just two of the 40 million people across the United States who have monumental student debt, as reported by CNN. In fact, student loans have increased by 84% since the recession (from 2008 to 2014) and are the only type of consumer debt not decreasing, according to a study from Experian, which analyzed student loan trends from 2008 through 2014.

The analysis also finds that in total, a staggering $1.2 trillion is bleeding students dry. …

Next, using some comments from my forum thread, lets see how this debt has affected lives. Here's how I started my thread:

" … According to a survey from Bankrate, nearly half (45%) of all adult Americans who took out student loans ended up delay some major financial or personal milestone. The effect is most notable among student loan borrowers in the 18-29 age range, where 56% say that this debt has put them off of investing or starting a family." …

Loan Debt vs. Disposable Income

A key statement from that article I linked to in my thread states:

According to a survey from Bankrate, nearly half (45%) of all adult Americans who took out student loans ended up delay[ing] some major financial or personal milestone. The effect is most notable among student loan borrowers in the 18-29 age range, where 56% say that this debt has put them off of investing or starting a family.

The key phrase there is “delay[ing] some major financial or personal milestone"

Thus, at least to me, it's clear that heavy student loan debt can alter the traditional evolutionary progression of young people's (and others') lives. Let's take a look at some of the comments my thread generated. Maybe they will inspire some of your own.

– … When I was 23, we married and started a family, before we had a house, or even knew what we wanted in life, let alone realized how much responsibility we had taken on. …

– A reasonable amount of debt (1/2 of expected starting salary or less) is leverage and a good investment in one's future. I actually like to see young people valuing education over the shiny new home or car. Delayed gratification may not always produce the economic numbers our consumer society celebrates but a bit of it will not hurt a young person. …

– … Not only do you need to have a plan, you need to ensure that your plan is realistic. I see lots of kids saying that they're fine borrowing $100K worth of loans because they're going to be an investment banker making $$ in a few years, or that they'll just work every waking hour and live with their parents until they're 35 to pay off the debt, without realizing that those things are not possible and only sound great when you're 17 and staring down a choice between two colleges.

– … Graduate school is already a matter of delayed gratification, and a decision that is almost certainly not profitable if you consider it from a purely economical perspective. Add in accumulating debt, and it would make graduate school a non-viable career option. …

– FWIW neither H nor I had student loans and we waited 10 years after marriage (at 23) to start a family. It worked our just fine.

– The topic of this thread is a bit of a no-brainer. If a recent grad has a job that, after paying rent (maybe with a roommate), utilities, a possible car payment and loan repayment, has little left for discretionary spending, its wise to not take on additional debt. …

– I do agree that student debt is a problem, but is is important to have some perspective. I still remember reading an article about housing prices my Senior year in college and thinking I would NEVER own a house. A few years later H and I were buying a house. At age 18 or 21, ten years out seems very far away. It seems so long to wait to have a family, buy a house or whatever, but it really isn't.

– It's very depressing that the much applauded solution posted in this thread is marry someone rich. We are obviously going back to the 1950s.


If you're not impressed with the fact that massive loan debt is literally changing lives, get a load of some of these facts from Student Loan Expectations: Myth vs. Reality:

… In a report out Tuesday, the group surveyed three sets of respondents: one made up of 500 current students between the ages of 18 and 24, one of 518 former students between the ages of 18 and 40 and one made up of 544 parents of current college students. The current students said they expect to have between $39,000 and $42,000 in student loan debt by the time they graduate, but expect to pay off that debt by the age of 33, on average. The group of former students said they hold an average of $30,000 in debt, but don't expect to pay it off until they're 41.

The standard repayment plan for federal student loans puts borrowers on a 10-year track to pay off their debt, but research has shown the average bachelor's degree holder takes 21 years to pay off his or her loans. …

Yes, that said 21 years! But is there hope? Check this out:

The University of Chicago is the latest school to eliminate student loans for some students.


The argument about the value of college vs. debt rages. Which side will you be on?


Be sure to see my other college-related articles on College Confidential.