Student Loan Debt Affects Millennials

Many of the statistics connected with student loan debt are eye-opening.

According to some estimates, Maryland’s college graduates leave school with the highest debt load in the country. According to the Institute for College Access and Success, 82 percent of students earning an undergraduate degree from Hood College in 2014 left school with debt, with an average amount of $31,229.

For the first time in history, Americans owe more in student loans debt than credit card or car loan debt. According to a report by the Consumer Financial Protection Bureau and the U.S. Department of Education, in 2012 there was about $864 billion in federal student loan debt and about $150 billion in private student loan debt in the United States.

It appears that the current generation of millennials is the furthest from achieving the American dream. Students are prolonging buying cars and homes, getting married, and having children, and part of their stress is surely due to the rising cost of higher education.

But looking at the big picture, is this cause for concern?

For many, the answer is yes. Student loan debt is compromising the future of the middle class and negatively impacts the economy, because people often stretch out their repayment period to twenty or thirty years.

Graduating with huge amounts of debt means that these students will face tougher economic challenges than those who did not take out loans to pay for their education. With large portions of graduates’ income going to student loan payments, a college education has the opposite of its intended effect and only widens the gap between social classes. Instead of starting businesses, putting money back into their communities, buying homes, and buying cars, millennials are bogged down with debt from student loans that affect their financial decisions.

Of course, college is about more than just getting a job and making money. It’s about acquiring knowledge, the path to self-discovery, and one’s first emergence in the adult world. However, a college education should make a positive impact on an individual’s net worth, not put them in the poorhouse.

With the odds stacked against them, students need to make the commitment to education with their eyes wide open and make sure they understand the full costs and the risks and rewards that lie before them.