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Three new reports, three more things to worry about.

2 minute read

Are we getting too comfortable with the student loan crisis? Like the national debt itself ($19.2 trillion), student loan debt is such a big number ($1.2 trillion) that we can barely comprehend it.

Back when it was “only” $1.1 trillion, Debt.com showed you how much you could buy with that sum, which included the world’s most expensive yacht, a jumbo jet, your own submarine, and your own island, and even your own Mars colony — and still have billions left over.

Sometimes, when a problem is so pervasive and so persistent, we tend to ignore it. Within one week last month, however, three studies reminded us to pay attention to student loan news…

“Delaying home ownership”

It’s bad enough that so many college gradates can’t afford their student loan payments — but even the ones who are making payments are suffering. Says the National Association of Realtors

Seventy-one percent of non-homeowners repaying their student loans on time believe their debt is stymieing their ability to purchase a home, and slightly over half of all borrowers say they expect to be delayed from buying by more than five years.

Home ownership is a major factor in a healthy U.S. economy, so this research shows how the student loan crisis hurts even for those who are current on their bills. That, in turn, hurts home-sellers, housing developers, and real estate agents who have nothing to do with student loans.

“Stressing out employees”

Speaking of people who don’t have student loans, a company called IonTuition polled 400 middle managers about their employees. These managers don’t have student loan debt themselves, but they were asked about their younger employees who do….

More than 90 percent of respondents recognize that student loan debt creates stress for employees. Approximately 80 percent are aware that this financial stress decreases employee productivity.

The problem is so pervasive, these managers would consider a new addition to their benefits plans: “a student loan repayment program would support talent recruitment.” In other words, they would lure job prospects with the promise of offering expert advice on reducing student loan payments.

“Sending parents into debt”

Parents sacrifice a lot for their young children. Now it appears those parents are realizing they’ll need to sacrifice a lot for their older children. A depressing report called Foundations for the Future details the results of interviews with 6,200 parents and concludes…

The majority (60 percent) of parents would be willing to go into debt to fund their child’s college education. … Fifty-eight percent of parents express that paying for their child’s education makes it more difficult to keep up with other financial commitments and consider this expense more important than long-term savings (40 percent), credit card repayment (37 percent), and retirement savings (37 percent).

Right now, the report says parents spend an average of  $14,678 per year on one child’s college education. That’s in addition to students paying 37 percent of their own college costs. That tells you just how ridiculously expensive college is becoming, and how it’s straining all but the wealthiest families.

What now?

No matter your party affiliation, you should demand solutions — or at least debate — from your candidates for national public office. Because the student loan crisis is quickly becoming a United States crisis.

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The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the opinions and/or policies of Debt.com.

About the Author

Howard Dvorkin, CPA

Howard Dvorkin, CPA

I’m a certified public accountant who has authored two books on getting out of debt, Credit Hell and Power Up, and I am one of the personal finance experts for Debt.com. I have focused my professional endeavors in the consumer finance, technology, media and real estate industries creating not only Debt.com, but also Financial Apps and Start Fresh Today, among others. My personal finance advice has been included in countless articles, and has appeared in the New York Times, the Washington Post, Forbes and Entrepreneur as well as virtually every national and local newspaper in the country. Everyone should have a reason for living that’s bigger than themselves, and besides my family, mine is this: Teaching Americans how to live happily within their means. To me, money is not the root of all evil. Poor money management is. Money cannot buy happiness, but going into debt always buys misery. That’s why I launched Debt.com. I’m glad you’re here.

Published by Debt.com, LLC