College debt is a huge burden for graduates all over the U.S. and the cost of tuition is climbing higher every year—so student loan debt is piling up. Many graduates struggle to manage their money once they’re out of school, which has caused them to delay big life events or even feel constantly stressed. Here are ten ways that college debt is making life harder for graduates today. Student loans are affecting their choices & opportunities in so many ways.
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Delaying Homeownership
Graduates with hefty student loans often can’t get approved for mortgages because their debt-to-income ratios are too high, so banks are wary of lending them money for a house. As a result, many are stuck renting longer than they’d like—even though they might have steady jobs. Buying a first home gets more and more delayed because of the weight of student debt.
Living with Parents Longer
Likewise, college debt forces graduates to move back in with their parents and this means they’re no longer starting independent lives but returning to childhood bedrooms to save money. It feels like a step backward that strains family relationships as they’re not able to leave the nest when they should. Eventually, this may also cause mental health issues.
Postponing Starting Families
Many graduates avoid getting married or having kids because of student loans since the monthly payments eat up a big chunk of their income. It’s far more difficult for them to save for a wedding or support a family because the costs of childcare are just too much. For those fresh out of college, so much debt hanging over them puts starting a family out of reach.
Mental Health Struggles
Carrying a lot of student debt also takes a toll on graduates’ mental health as the constant worry about making payments on time & stretching a tight budget leads to stress. Sadly, some graduates even suffer from depression because of their financial situation—feeling overwhelmed by debt isn’t uncommon. It greatly affects their overall well-being after college.
Taking Jobs Outside Their Field
Many graduates end up taking jobs that have nothing to do with what they studied because they simply want to keep up with loan payments. As such, they go for higher-paying positions—even if it means leaving their field of interest behind or abandoning their dream career. The pressure to earn enough to pay off debt forces them into other roles, creating a sense of dissatisfaction & disconnection from their passions.
Risk of Defaulting on Other Debts
Lots of people fresh out of college struggle to pay other bills because of their student loans and this includes defaulting on credit card payments & car loans. Even utility bills might fall behind because something’s gotta give when money’s tight & this may lead to late payments. They’re left in a risky financial position that only creates more penalties and interest piling up.
Damaged Credit Scores
Missing student loan payments really hurts a graduate’s credit score and with a lower score, getting approved for new credit cards or even an apartment lease is much harder. Landlords & lenders might see them as risky and they’ll have to face higher interest rates if they’re approved. This only adds to their financial burdens since a damaged credit score has long-lasting effects on their financial options.
Lower Retirement Savings
Saving for retirement often takes a back seat, too, because most graduates can’t afford to put money into a 401(k) or IRA when they’re starting out. For them, the focus is on paying down debt, so they postpone investing for the future and have less saved up when retirement rolls around. This greatly affects their long-term financial security since they have nothing to rely on when they’re older.
Hindering Further Education
Many graduates who are already weighed down by student loans often decide against going back to school because the thought of taking on even more debt is too much. They might need a master’s degree or a certification for a better job—but they just can’t afford it and this limits their career advancement. As such, any opportunities for higher pay in the long run are virtually non-existent because they simply don’t have the skills to ever achieve these jobs.
Relying on Side Gigs
To keep up with student loan payments, lots of graduates pick up side gigs or part-time jobs, which involve working evenings & weekends. Some will even freelance on top of their full-time jobs and balancing multiple jobs in this way is rather exhausting. It leaves little time for relaxation or social life, even though the extra income helps with the bills—but the constant workload leads to burnout.
Disclaimer: This list is solely the author’s opinion based on research and publicly available information.
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