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Student Debt: A National Crisis With No Sign of Slowing Down

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Pretty brunette sitting in the hallway and feeling overwhelmed and stressed because of school

The U.S. is in over $1.4 trillion of student loan debt, and the borrowers feel that burden impacting their quality of life.   

Three-fourths of millennials stress daily over their student loans and half stay at a job they dislike to pay them back, says a joint study from LendEDU and Laurel Road Bank, an online lender.

In this roundup, we go over the psychological effects college students experience. From the stress millennials carry, to fear that stops adults from finishing their education.

A financial burden on millennials

There are 45 million student loan borrowers in the U.S. And 60 percent of those who graduated from college owe $27,975 each, on average, according to the study. Laurel Road and LendEDU polled 1,000 borrowers to see how their loans impact them after graduation, and the results are quite bleak.

Over half (56 percent) say they’re self-conscious and embarrassed about the amount of debt they’re in for their education. has even reported on one college senior who was so fed up with his high debt, he avoided borrowing even more for housing his last semester by camping on campus.

Of course not everyone goes to such extremes, many just wish to find a job after college that will help them pay their debt back. Almost three quarters (71 percent) think that a student loan work benefit is important when looking for a job. Three-fifths (58 percent) would prefer an employee student loan benefit from work over vacation time.

The study mentions that universities can improve how well they inform student loan borrowers of what they’re getting themselves into, before they take out loans.

“Preparing student debtors while they are in college for the repayment journey that lies ahead could make for a much smoother transition post-graduation,” the study says. “Perhaps with more of an understanding of the educational debt repayment burden, borrowers in the working world can create a plan that mitigates stress.”

It’s funny the study should mention that, because many student borrowers are clueless as to how their loans work.

Ignorance is far from bliss

More than half (52 percent) of student loan borrowers are unaware their unsubsidized loans accrue interest while they attend college. And 1 in 10 don’t know they have to pay back their loans — even if they can’t find a job after college, says study from Student Loan Hero.

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In case you’re unaware of how student loans work yourself, here’s some quick background information…

There are several different types of loans offered to college students. Some are public, provided by the federal government, others are from private lenders. The type of loans students take out can make a world of difference on the amount of interest they’re expected to pay.

Federal loans are broken into two categories: subsidized and unsubsidized. Subsidized is just a fancy way of saying the government set a small interest rate, and limits the amount you can borrow. These loans are only for those in need of financial assistance, and borrowers need to fill out a Free Application for Federal Student Aid. Borrowers of unsubsidized loans don’t need to prove financial need, but are still required to apply for FAFSA.

Thirty-eight percent of borrowers are unaware that there is a set interest rate on federal loans, according to Student Loan Hero’s study.

Subsidized loans do not accrue interest while in college, while unsubsidized do. Borrowers are charged interest even while attending school.

If you fall on hard times — where you lose your job or have a medical emergency — some lenders allow borrowers to pause their payments for a period of time. (Referred to as a forbearance agreement.) However, even while your payments are on pause, the interest still grows.

Almost half (47 percent) of student loan borrowers don’t know that. They assume that their loans will stop accruing interest while they’re in forbearance.

Fear of student loans

Potential non-traditional students — those 23-55 years old — want a college education, but debt holds them back from earning it. A recent survey from Champlain College concluded that 60 percent of U.S. adults consider finishing their college degree, but worry about what it will cost them financially.

Seventy percent worried about affording it, and 3 out of 4, are concerned about being burdened with student loan debt.

“Many adults would go back to school with the hope that higher education will unlock greater opportunities and gratifying careers for them,” says Laurie Quinn, provost and senior vice president for academics at Champlain College. “More awareness and action can close this gap, so adults have access to the quality, affordable education they deserve.”


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