The student loan crisis is a hot-button topic, with many of the 2016 presidential candidates weighing in on the issue. But it's also a very personal problem that leaves many young Americans stuck with bills they can't afford to pay. Starting off your working life with a significant amount of debt and a low-paying job can make it seem impossible to get ahead. Results from a new survey by Student Loan Hero, a start-up dedicated to helping consumers organize and manage their student loans, found college grads are putting off major life decisions because of their debts.
One in seven is delaying marriage, more than one in three are not able to buy homes, and one in five is putting off plans to start a business. How will delaying these milestones affect our society and economy in the future? And what's the solution to our student-loan woes?
Andy Josuweit, CEO of Student Loan Hero, argues that the easiest way to pay off these loans is to make more money. This is definitely easier said than done, especially when you consider the wage gap women face. He also points out that this is a marathon, not a sprint.
Student loan debt is more than just a political issue to be debated — and for the people who are weighed down by huge monthly payments, it can be hard to see the light at the end of the tunnel. We spoke with nine people — men and women of many ages who are struggling to pay down their debts — about the personal decisions they're delaying because of those loans.
Because of my debt, I was never able to do an internship.
"I feel like my student debt has caused a snowball effect on both my career and financial situations. Because of my debt, I was never able to do an internship, since most of them are unpaid. I did the work-study program and had an office job at the university.
"When I graduated and started looking for a job, many people I interviewed with said I was under-qualified for even entry-level positions. It was a rather stressful time in my life. [I felt] like I had made a mistake taking on so much debt when I wasn't seeing the benefits, especially when the majority of people I knew who were in better financial positions and able to do internships had secured jobs before graduation or just after.
"I had to move home to North Carolina, because I couldn't afford to stay in New York with no job and the loan payments... I've been home for three months, and not a day went by that I didn't send out multiple résumés to job listings all over the country and abroad. I feel very lucky that I found a job in New York that is willing to take a chance on me and was willing to conduct interviews via Skype.
"I'm starting my job in September, so at least I have a little time to prepare for my loan repayment, which should take me 10 years to pay off if I keep up with the substantial monthly payments."
— Lauren, 21
Paying off my debt makes it exceedingly difficult to feel comfortable starting a family.
"What’s the true cost of student loan debt? Probably about 15 years. That is, the loans I’ve accumulated in obtaining an undergraduate degree and a law degree have, by my rough calculation, set me about a decade or two behind the trajectory I’d like for my life.
"I'm very lucky compared to many law grads: I found good employment quickly. And yet, because of my significant income-to-(non-dischargeable)debt ratio, I still live with two roommates in a fairly dilapidated apartment, far outside Manhattan. I own very little.
"Paying off my debt makes it exceedingly difficult for me to save money, travel, obtain a mortgage, and to feel comfortable starting a family. Because I work in non-profit law, I’m eligible to have the balance of my loans written off after 10 years. Add five more debt-free years to save for the above, and it will be a 15-year delay to starting the next phase of my life."
— Geoff, 34
The debt wouldn't have been so bad if I hadn't lost my job.
"I deferred payments for a year after graduating University of Phoenix, because I could. [Then, I] paid for a year; then, [I] lost my job in 2008. I ended up missing a bunch of payments while requesting another deferral for hardship. The debt wouldn't have been so bad if I hadn't lost my job and hadn't had to go through my life savings before getting on food stamps for a year. I was a single mom.
"The student loan debt started out, I think, at $40k, and my interest rate is not horrendous at 4.5%. But that, coupled with credit card debt and the loss of my IRAs and 401(k)s, put me in a big hole I have had to dig out of. I got a good temp job...which is now a permanent job, at a great firm. [I've] built my 401(k) back up to about $43,000. I've paid off my card debt, but [my] student loans, with all the deferred interest, are only down to $27,000 after all these years.
"If I pay the student loans off at the current minimum payments, I should have them paid off by 2030 or thereabouts. I have no savings, other than the retirement I've built back up. I haven't been able to put anything together for a down payment on a house, and more urgently, nothing to pay for college education for my two college-age kids."
— Mary, 54
The debt is keeping us from being able to afford kids.
"The debt is keeping us from being able to afford kids. We were planning on starting to try this winter, but NOPE. Insurance only covers in vitro if you have infertility problems — you have to actively be having unprotected sex (with a male partner) for six months to be considered to have fertility problems. It would cost us between $5,000 and $20,000 per try to have kids."
my loans prevented me from ever having a savings account.
"My student loan debt has made me way more dependent on my partner than I'd like. We both earn the same amount of money, but he graduated college debt-free, so he gets to keep/spend/save significantly more of his salary than I do mine. Over our eight years together, my loans prevented me from ever having a savings account (I opened my first one this year at age 30, and it currently has a sad $300 in it).
"When emergencies happen, like an ER visit or a theft, my partner pays the difference. It's an embarrassing situation to be in, especially as a feminist, but I don't have any family to turn to in a financial pinch — so I know I'm lucky to have a partner who is willing and able to be my safety net. Otherwise I suppose I'd pull an It's A Wonderful Life and all my friends would come throw dollars in a hat."
— Amelia, 30
I felt like a failure, even though I had earned a masters degree.
"Because of my particular degree, I wasn't able to find a good, paying job in my field — and because of my student loans, I was living paycheck to paycheck. I couldn't save up for a new car or afford to fix mine properly when it kept breaking down. I couldn't keep a nice apartment or buy quality furniture. I couldn't even afford to buy healthy food, and I often ate things like dehydrated mashed potatoes. I also didn't qualify for any government assistance, because I made too much money ($17,000 a year before taxes). Sometimes I didn't qualify for deferments because the loan companies said I made enough to pay them.
"I felt like a failure in a lot of ways, even though I had earned a masters degree; I was barely making ends meet. Because of my student loan debt, I felt like I couldn't have the life I envisioned for myself. After living like this for a while, I changed my career goals and went in the opposite direction professionally, striving to work in an office doing more stable administrative work.
"No one ever tells you all this when you are 17 and signing on the dotted line — let alone when you are...a child [who's told] you can be anything you want to be. People say that it will take hard work to reach your dreams, but that isn't the only thing that it takes if you decide to go to college."
— Michelle, 29
my life shouldn't be overshadowed by the debt I acquired from my education.
"Fast-forward to three months after graduation and me rushing to meet the school's financial advisor during the lunch hour I had during my internship (yeah...INTERNSHIP). It was during this meeting that the shock of student debt hit me — and boy did it hit me hard. After tallying up all my loans, my advisor recommended an income-based repayment plan, making my monthly payments...manageable for the next 20 years (yikes!).
"As of right now, my monthly loan payment is very little, but that will change as I advance in my career and in life. My student loans weigh on my mind every day, since I know that both the decisions I make in life and the decisions made by legislators can affect me. With the upcoming election year, I am paying much more attention to each candidate's stance on student loan debt, and [I] want to make sure my voice is heard... My life shouldn't be overshadowed by the debt I acquired from my education."
— Elliott, 25
I am going to be paying my student loans until I am 65 years old.
"Thankfully, I have a job in the field I studied, but due to the huge amount of student loan debt...I constantly feel like I am living and working just to pay my loans... I graduated in 2008, at the height of the recession, and Sallie Mae did not make it easy for me at all. They demanded money from me when I was flat broke and living off of $1.00 microwaveable Banquet meals.
"I currently live off of one paycheck a month, since the other one goes entirely to paying my loans. Not even a joke. I am approaching 30, my credit is fucked, I have little savings, [and] I still struggle to meet my own needs monetarily. I can't even imagine what bringing a child into this world would mean for me. I can't have a kid; I am going to be paying my student loans until I am 65 years old."
I hate the idea of owing people money.
"After about two years of living at home and aggressively putting payments toward [my loans], along with money my parents contributed after they sold their house, I'm down to less than half of that. I moved into the city a couple of months ago, and while I had the luxury of living at home, allowing me to pay off a bulk of the money I owed, the amount that I have left is still very much a burden.
"I hate the idea of owing people money — especially when said money is steadily growing interest — so I try to contribute more than the minimum amount each month. This, in turn, cuts into the amount of money I can save monthly, but also how much I can afford to shell out for rent, groceries, bills, and actual fun things each month.
"Sure, NYC is an expensive city to live in, debt or no debt, but I can't help but think the extra couple of hundred dollars a month I throw at my debt could allow me to live a slightly fancier life (fancy by city standards, at least). The day those black-cloud required payments cease hovering over me and I get to keep my whole paycheck will be a cause for celebration, indeed."