Student debt has reached an all-time high in the U.S., with over $1.6 trillion in student loans spread across 45 million borrowers. While repaying student loan debt can cause stress and financial strife, it’s also leading Americans battling this debt to prioritize their student loans over other major life decisions, like buying a home or traveling.
To get to the bottom of this crisis and better understand the hardships facing student loan-clad Americans, College Finance conducted a survey of over 1,000 college graduates both with and without student debt.
This survey exposed some interesting discoveries on how life priorities differ based on whether you’re facing student debt.
The Breakdown: How Much Debt Are We Talking About?
While student debt is at a record high in the country, how much are individual graduates actually burdened by? Survey respondents had an average of $27,561 owed in student debt. 66.2% of those with debt noted that they only or mostly pay the minimum amount due, making it difficult to get ahead on student loan payments.
Sacrifices Made to Pay Down Student Debt
In addition, 90% of those with student debt reported making sacrifices in their life to help pay down their student loans. What types of sacrifices? Take a look at some of the most common below:
- Paying Bills – 82.9% of those with student loan debt could do this, compared to 89.7% without student loan debt.
- Dining Out – 72.4% of those with student loan debt could go out to eat, compared to 92.5% without student loan debt.
- Paying for a Cellphone – 69.4% of those with student loan debt could afford a cellphone plan, while 82.7% without student loan debt could do the same.
- Purchasing Streaming Services – 63.9% of students with loan debt could buy streaming services, compared to 84.1% without student loan debt.
- Paying for Health Care – 56.7% of those with student loan debt could afford their health expenses, compared to 78% without student loan debt.
- Traveling – Only 48.6%, or less than half, of those with student loan debt could afford to travel, compared to 81.3% without such debt.
- Buying a Car – 46.2% of those with student loan debt could go car shopping, compared to 79.9% without student loan debt.
Overall, those without student loan debt were more financially capable to afford other expenses and luxuries than those with student loan debt.
Repaying Student Loans
The top way to repay student loans as quickly as possible was to reduce personal spending. The second method was through a side hustle. In fact, more than half of millennials with student loan debt got a second job to help pay off their student loans.
Those with student loan debt worked an average of 51 hours on their side hustle, compared to the 36 hours those without debt committed.
While many millennials with student loan debt are waiting longer to make large purchases or save for retirement, after student loans are paid off, these individuals would be willing to take on new debt. Forty percent would incur new debt in order to buy a home, 27% would in order to buy a car, and 18% would so they could travel.
It’s no surprise that there’s a clear connection between the drop in homeownership rates and the increase in student debt among young Americans. Once graduates have freedom from student loans however, it seems they’re prepared to take on the traditional debt their parents took on, such as buying a house and car and taking leisurely trips.