For millions of Americans, higher education represents a path to financial prosperity and opportunity. But, due to rising college costs, many students find it necessary to finance higher education with student loans. Unfortunately, some borrowers find it difficult to pay back their hefty debt upon graduation.
When considering your options, it helps to get a look at the big picture and understand the full impact and scope of student loans. Here’s a snapshot of student loan debt in the United States in 2021.
Total Student Loan Debt
- Total outstanding federal student loan debt is $1.7 trillion and growing 6 times faster than the nation’s debt
- Student loan debt is now the second-highest consumer debt category — second only to mortgage debt and higher than debt for both credit cards and auto loans.
- Zippia surveyed 500 workers with student debt to better understand the impact of student loan debt on the job market as well as big life milestones. Unsurprisingly, excessive student debt has not only shaped some workers’ career choices but also pushed back (or halted entirely) homeownership, parenthood, and marriage.
- Currently, in the US, 45 million borrowers owe $1.6 trillion in student loans with a total average debt of $28,950. What does this mean for the job market?
Key Statistics
- 92% of student loans are through the federal government
- 62% of the class of 2019 graduated with student debt.
- According to the Urban Institute, 48% of student debt is held by households with graduate or other professional degrees.
- 35 to 49-year-olds owe the biggest amount of student loans in sheer volume at 601 billion spread across 14 million borrowers.
- 35-to-49-year-olds also have the highest average student loans at $42,373.23 per borrower.
- 8 million borrowers over 50 still owe significant student loan debt even as they near or exceed retirement age.
- 20% of student loan borrowers are in default.
- College-drops out are responsible for 63% of student loan defaults.
- First-generation college students are 2.7 times more likely to default on college debt than students whose parents have achieved higher education.
- 54% of respondents feel their career has been hindered by student loans.
- Over one-third of student loan holders have held multiple jobs or worked additional hours due to student loans.
- 25% work outside of their chosen field due to debt obligations.
- 1-in-2 workers with student debt have delayed or decided against further education due to student debt.
- Those with student loans over $100,000 were most likely to say student loans had delayed homeownership.
- 54% of respondents feel their career has been hindered by student loans.
- Over one-third of student loan holders have held multiple jobs or worked additional hours due to student loans.
- 25% work outside of their chosen field due to debt obligations.
- Those with student loans over $100,000 were most likely to say student loans had delayed homeownership.
- Percentage of borrowers who owe less than $40,000: 75%
- Number of borrowers who owe $100,000: 3.2 million
- Percentage of all student loan debt held by those who owe $100,000 or more: 37%
Student Loans Impact on Career and Life Choices
“In addition to causing personal financial hardships, student loans impact the job market and cause holders to delay traditional life milestones.
From working multiple jobs to working less than desirable jobs unrelated to their degree, many job seekers feel the pressure to pay off their mountain of student debt.
To better understand how student loans are influencing career choices, Zippa surveyed 500 workers with student debt.
Quick Facts
- 54% of respondents feel their career has been hindered by student loans.
- Over one-third of student loan holders have held multiple jobs or worked additional hours due to student loans.
- 25% work outside of their chosen field due to debt obligations.
- 1-in-2 workers with student debt have delayed or decided against further education due to student debt.
Other Common Effects
- Struggle to afford other necessities (housing, medical costs, etc.)
- Stress, anxiety, and other negative psychological effects
- Decreased credit
- Unable to save for children’s future college costs
Student Loans Can Open Doors, But Close Some
Ultimately, student loans are needed for many students to complete higher education and obtain the career they want. However, too much student loan debt holds students back. Student loans can make career choices limited but Income Share Agreements can help students pay for their education in a timely and manageable manner.
An ISA Could Be A Good Option For You
Under an Income Share Agreement, students have more options in higher education because they aren’t limited by finances.
Because their future funding is dependent on graduates securing paid employment, many schools may offer job search assistance. This helps students to feel secure when they are picking a school or program because they won’t have to make payments until they secure a job.
Schools have little incentives to help graduates find a good-paying job post-graduation under traditional loans because their payments are not tied to the student’s income, and a lender will have likely already paid them for your tuition.
An alternative to traditional private student loans in America is long overdue. We believe ISAs are a great option. It’s time for a change and ISAs can be that change.
About Meratas
Meratas is the leading Income Share Agreement (ISA) software company, providing a full-service, turnkey, SaaS platform to design, originate, and manage ISAs. We help universities, bootcamps, trade schools, and membership programs increase enrollment and open accessibility to their programs. All through the power of Income Share Agreements.
We also help those looking to get an education, up-skill, or re-skill get into the career of their dreams. All at, generally, no upfront cost. We pair individuals looking for fresh new careers with the best educational programs on the Meratas platforms to reach their professional goals. If you’re looking to break into your new career, check out our student page and we’ll help you find the job of your dreams.
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Sources
Although every effort has been made to provide complete and accurate information, Meratas Inc. makes no warranties, express or implied, or representations as to the accuracy of the content contained herein. Meratas Inc. assumes no liability or responsibility for any error or omissions in the information contained herein or the operation or use of these materials.