University graduates are buried in student loan debts, but not willing to give up luxuries
Most college students graduate with some level of student loans these days. Paying a large amount of debts is becoming a hard reality for many of the millennium generation.
In fact, according to a new Best bank survey, millennial age graduates are spending a huge 18 percent of their salary on student debt payments. The survey found that 60 percent of young people in the millennium generation go through this situation. They expect to make payments on their student loans until well into their 40s.
The U.S. Department of Education UU. He calculated the national average of student loan debt for college graduates at $ 29,400. Another survey found that the average student debt is much higher: approximately $ 41,286.
Despite that considerable average, 15 percent of graduates surveyed said they did not know the total balance of their student loans. More than a third of graduates (37 percent) reported they had no idea of their interest rate loans
Priorities for Students
When faced with loan payments, some young people are not willing to prioritize the payment of student loans. They prefer to allocate their money to spending on luxury items and quality of life.
For example, when asked what they were willing to give up in exchange for lower student loan payments, this is what the survey revealed:
- Less than half (45 percent) were willing to reduce what they spend on eating out to pay off their debts.
- Only 46 percent said it would reduce their entertainment and social events expenses.
- A mere 40 percent were willing to limit their housing expenses (rent or mortgage).
- Only half of millennials were willing to cut their expenses on clothing, footwear and accessories.
“They are very committed to living their life the way they want to live their life. At the same time they are frustrated as they are by student loans, they are not willing to make those lifestyle concessions. ” This is the opinion of Brendan Coughlin, president of consumer loans at Best bank.
At the same time, more than half of millennials reported that they regretted how much they lent to attend college. And a surprising third of graduates said they would have skipped college if they had understood how expensive it would be in the end.
“Unfortunately, the long-term cost of the university is leading some graduates to question the value of their investment. In many cases, before they have fully explored their opportunities to significantly reduce their payments, ”said Coughlin.
Do you or your children pay student loans? How much of your annual salary are you forced to spend on loan payments?