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NextGen Magazine

 
 

Nearly Half of College Grads Think They'll Never Pay Off Student Debt

By:
Chris Gaetano
Published Date:
Sep 11, 2019
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A Fidelity Investments survey of over 4,000 people found that 46 percent of current college students and 47 percent of recent graduates fear that they will never be able to pay off their student loan debt. This puts them in good company with the rest of the country, as a poll from last year found that 13 percent of Americans overall believe they will die before fully paying off their debts, an estimate that is likely too conservative, given the number of people who die in debt now. 

As for what that college debt bought, slightly more people were satisfied than dissatisfied: 23 percent said "the value of the education is worth more than the money spent," versus 19 percent who said it was not worth the money spent.

Meanwhile, 30 percent said that they don't necessarily regret going to college, they would have made different choices now that they know the true financial impact. As for what, specifically, they would do differently, 42 percent said they would have started saving earlier, 22 percent would have researched more options, and 13 percent said they would have gone to a less expensive school. 

Regardless, the survey also found that debt is stressful: Even when respondents were fully aware of the costs before college, 42 percent said they felt stressed about their debts. Those unprepared were even worse, with 60 percent of those who admitted to not understanding the cost of college reporting that they felt stressed. This is in line with the results of another poll from last year, which found that 73.4 percent of millennials feel stress related to a student loan on a daily basis, while 55.6 percent said their debts made them feel self-conscious or embarrassed.  

Student debt has grown so large (currently at $1.5 trillion) that the Federal Reserve has noted that it is having wider economic effects. In a 2016 research paper released by the Federal Reserve, it calculated that every 10 percent increase in student loan debt reduces home ownership by 0.1 percentage points among 25- and 26-year olds who had attended college. Another research paper by the Federal Reserve found that increases of one standard deviation in student debt reduced the number of businesses with one to four employees by 14 percent on average between 2000 and 2010. This has led to rising interest in an across-the-board student debt cancellation, which a paper from the Levy Economic Institute at Bard College said could have a meaningful stimulus effect with only moderate effects on the federal budget deficit, interest rates and inflation.