Many of today’s college undergraduates have gone through school knowing student loan payments were on pause indefinitely, and the prospect of widespread cancellation was closer to becoming a reality than ever. We’ve all heard the news about the endless rising student loan debt and its negative impact on graduates trying to enter their new phase of life with the immense pressure of being weighed behind by this never-ending college debt. This student loan debt crisis is a subject of increasing consideration, research, and analysis by federal government agencies, nonprofit organisations, economists, and the students who carry the balance.
Over the years, student loan debt has surpassed $1.3 trillion and is rising by the minute! This excessive debt not only affects the ability of students' career choices, diminishing their quality of life, but also limits their strength from reaching their full potential. This can have significant effects on post-college life, impacting various aspects of an individual's financial, personal, and professional well-being. Do we really want our future generations to be saddled by this just to receive further education? Well, in this article, we will be diving into the main effects of student loan debt and the immense pressure it can have on the daily lives of millions.
What are the main effects of student loan debt?
1. Financial Burden
The financial burden of student loan debt weighs heavily on individuals, impacting their financial flexibility and long-term financial goals. Loan repayments consume a significant portion of income, leaving a barrier for students' savings, investments, and selective spending. Accumulation of debts further exacerbates the financial strain, making it difficult to repay the debt fully.
2. Mental and emotional distress
The constant worry about debt payments that just keep piling up takes a significant toll on students' mental and emotional well-being, with the weight of financial obligations, coupled with the pressure to succeed academically to establish a stable career, also on the back of their minds, it can overwhelm students to the point of mental and physical exhaustion.
3. Greatly limits the potential for students
Student loan debt can disrupt an individual's path in multiple ways. It can completely shape the career choices available, limiting their options and potential. Imagine receiving the internship opportunity of your life. Although it would provide immense help in advancing in your field of study, the pay is low, and the time commitment would require you to quit your part-time job. Unlike your peers without any financial burden who have accepted immediately, you are forced to turn down the offer and head back to your part-time job. Furthermore, in some cases, especially in the financial industry, getting a job can be extremely difficult due to background and credit checks before receiving offers, with prospective employers possibly reconsidering the position given.
4. The delay in the ability to be able to purchase property
Too much student loan debt may severely impact your ability to purchase property. First off, repaying your student loans could keep you from having enough savings for the minimal down payment that many lenders demand, and if there is already a struggle to repay them, your credit score may be a deterrent for many potential lenders. Furthermore, when determining whether to grant you a mortgage, lenders take a variety of financial factors into account. Most important among them is your debt-to-income ratio. If a lender determines that your debt load is too great for you to make extra mortgage payments each month, they will most likely deny your loan application due to worries of late payments.
Conclusion
Overall, student loan debt can significantly affect a graduate student's post-college prospects and financial decisions. Before taking out a loan, you should carefully weigh out all of your options. Considering grants, part-time employment, scholarships, and more affordable schools are all great alternatives or ways to limit the impact of student loan debt on your future. If you struggle to make an informed decision, you can always reach out to your school counsellors, teachers, family members, or even the working Family and Student Financial assistance agency, which is a local government agency targeted towards students staying locally for further education.
Works Cited
10 Ways Student Debt Can Derail Your Life. (2024). Retrieved May 7, 2024, from Investopedia website: https://www.investopedia.com/articles/personal-finance/100515/10-ways-student-debt-can-destroy-your-life.asp.
The Impact of Student Loan Debt. (2016, June 13). Retrieved May 7, 2024, from www.nar.realtor website: https://www.nar.realtor/research-and-statistics/research-reports/the-impact-of-student-loan-debt
Working Family and Student Financial Assistance Agency - Non-means-tested Loan Scheme for Full-time Tertiary Students (NLSFT) - Learn before applying. (2024). Retrieved May 7, 2024, from Wfsfaa.gov.hk website: https://www.wfsfaa.gov.hk/en/sfo/postsecondary/nlsft/tips.php
Porter, T. (2021, May 4). How Student Loan Debt Can Affect Your Life | LendEDU. Retrieved May 7, 2024, from LendEDU website: https://lendedu.com/blog/impact-of-student-loan-debt/
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