Study Highlights Concerns About Student Debt

A recent survey of Millennial-generation young adults showed that nearly two-thirds of them struggle with student debt.

People born between 1980 and 1995 are more likely than any previous generation to shoulder an enormous burden when it comes to paying for their educations. Sixty-three percent of those enrolled in a post-secondary program of some type either have already graduated with student debt, or say that will graduate with debt. Forty-six percent of them already owe money on their student loans, whether or not they’ve already graduated.

The survey looked at the responses of 1,338 young people across the country. The average student debt nationally was $27,162 per student, and Millennials paid an average of $317 per month toward their student debt.

Feeling the effects of student debt

The survey asked respondents whether they felt their student debt payments impacted their budgets overall and their ability to spend month, 30% said that it “very much” affected them. Another 30% said it impacted their spending “somewhat,” and 15% said it had “very little” effect on them. The remaining 25% said it did not affect their spending.

Whether or not they feel the effects of their student debt, there’s no doubt it does make a difference to their bank accounts. Employed Millennials report an average income of $48,146 per year. After taxes, Social Security payments, Medicare, 401K and other costs, that gives them an average monthly take-home paycheck of $2,808. So student loan payments would take about 11% of their income each month.

Finding a solution

One way to handle some of this crippling student debt is by transferring other outstanding balances to a zero-percent interest credit card. Many Millennials also graduate school with regular credit card debt as well as student loan debt; paying less interest, or no interest, on these debts can help free up funds to pay down student loans.

If they didn’t have to pay off student loans, 54% of Millennials surveyed said they would put some money toward saving for emergencies, 42% said they’d put the funds toward buying a home, 32% said they’d save for retirement, and 31% said they’d put it toward taking vacations. (Respondents were allowed more than one answer.)