Nearly One-Fifth of Millennialsâ€™ Salaries Spent on Student Loan Repayments
Adam Rifkin stashed this in Young Americans
It's an advertorial from lowcards but it still makes the point.
College graduatesÂ with student loans spend nearly one-fifth (18%) of their salaries on student loan payments, according to newÂ researchÂ from Citizens Bank. 60% of these graduates, aged 35 and under, expect to be paying student loans into their 40s.
Even though theyâ€™re struggling with this debt, only half of the respondents have looked into refinancing options, consolidating private and federal loans or improving the terms of their loans.
The cost of college has increased 13% for public universities and 11% for private nonprofit colleges in the past five years, according to The College Board. To meet these rising costs, 77% of the survey respondentsÂ borrowed federal loans, and one-third received private loans, which are typically smaller and require a co-signer.
â€śThe long-term cost of college continues to be a major challenge for Millennials, even after they have established themselves in the workforce and significantly improved their credit from where they were when they started school,â€ť said Brendan Coughlin, president of Consumer Lending for Citizens Bank. â€śAs this generation of college graduates starts to contemplate future life events like home purchases and retirement, it becomes increasingly important for them to take control of their college debt, whether itâ€™s through refinancing or other tactics that can help them limit its impact on their overall financial health.â€ť
The survey found students are cutting costs in other areas to pay for their loans, including:
- 54% limit travel
- 50% spend less on clothes, shoes and accessories
- 46% limit their spending on entertainment and social events
- 45%Â spend less at restaurants
- 40% lower their rent or mortgage payments
Due to this oppressive debt, many graduates are expressing buyerâ€™s remorse over their education. 57% said they would have borrowed less, and 36% said they would not have gone to college if they had known how much it would cost.