Let's Talk About Student Loan Debt

It's the (huge) expensive elephant in the room.

It’s 2021, and there are nearly 44.7 million American adults with student loan debt. More than likely, some of you reading this have student loan debt, know someone that does, or are considering taking on more debt to go back to school. The truth is, more and more people are utilizing federal and private loans to be able to afford higher education. For the next three weeks, we will be digging into this topic so you can have all the information you need before applying for a loan, or to help you successfully pay them off.

First of all, we must keep in mind that education is a long-term investment; the loans and the money you’re spending today will give you profits in the future and for the rest of your life. But like with any big investment, it carries big risks.

That being said, we’re starting to see that assuming this kind of debt in your 20’s might stay with you until your 30’s, or in some cases, your 40’s and beyond. According to the latest statistics, the debt on student loans is over $1.71 trillion. That’s about $739 billion MORE than credit card debt. According to the Department of Education, a person who completed a bachelor’s degree in 2019 owes, on average, $29,900. More often than not, we’re seeing college graduates working jobs they don’t like or that are not related to their education, just to be able to repay the loans they took during college. Having this debt also affects the decision to enroll in graduate school and can damage your credit rating for years. Needless to say, this kind of financial pressure, frustration, and stress ends up affecting our health and relationships.

Student loan debt is not just a personal financial problem: the education debt burden is now being seen as the national emergency that it is. A report published in 2018 by the Federal Reserve Bank of New York examined the link between rising tuition, swelling education debt, and diminished homeownership among millennials. The dream of owning your own house or car has been replaced by the dream of canceling your student loan debt.

Recognizing the damage that can be done to the American economy when a substantial number of consumers can no longer participate in it due to insurmountable student loan debt, the Biden administration announced this spring that they are considering canceling up to $50,000 in student loan debt. No decision has been made yet, but activists and economists alike agree that unchecked student loan debt can keep consumers from actively participating in the economy: they are hindered from investing, purchasing homes, and saving.

But fear not: during our new three-part series, we will learn more about loans, how and where to get them, and how to successfully repay them. More importantly, we will learn how to afford a good education without putting a mortgage on your future and without risking the plans and dreams you have for yourself and your family. There’s no magic in it, but making smart decisions at the right moment will make your path to a debt-free future smoother.