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Today, one in seven Americans currently has student loan debt. If you’ve recently graduated, this fact should come without surprise. Higher education is expensive, and increasingly students and families are turning to student loan debt to finance their education. Tuition hikes, generous loan limits, and the recovering economy has pushed the outstanding amount of student debt in the United States to$1.3 trillion!
Last month, the LendEDU team stumbled onto an interestingreportfrom American Student Assistance, a private not-for-profit dedicated to opening the gateway to opportunity by revolutionizing the way students approach, finance, and repay their higher education. American Student Assistance reports that student loan debt has caused 29% of student loan borrowers to put off marriage, and 43% of borrowers to delay starting a family. The report went onto say that 73% of student loan borrowers have put off saving for retirement as a result of student debt. And, in areportfrom GoodCall, researchers learned that student loan debt costs borrowers a whopping $500,000 in retirement savings.
This got us thinking…what would student loan borrowers be willing to do to erase their debt?InJanuarywe found out that current students no nothing about their debt. In February, we aimed to find out what graduated student loan borrowers would do to completely pay off their debt. So at the start of the month, we commissioned an online survey of 513 graduated student loan borrowers. The results of our survey are fun, surprising, and demonstrate the lengths that Americans may go to pay off their debt.
Survey Results
Here are the highlights from our survey:
28.07 percent of borrowers would name their first born daughter Sallie Mae, if it meant that they would have no more student loan debt.
40.35 percent of borrowers would take one year off of their life expectancy, if it meant that they would have no more student loan debt.
56.73 percent of borrowers would take a punch from Mike Tyson, if it meant that they would have no more student loan debt.
6.47 percent of borrowers would cut off their pinky finger, if it meant that they would have no more student loan debt.
4.09 percent of borrowers would contract a random sexually transmitted disease (STD) for life, if it meant that they would have no more student loan debt.
57.89 percent of borrowers would give up all social media for life, if it meant that they would have no more student loan debt.
20.47 percent of borrowers would wear the same outfit, every day, for life, if it meant that they would have no more student loan debt.
35.67 percent of borrowers would give up texting for life, if it meant that they would have no more student loan debt.
56.14 percent of borrowers would abstain from alcohol and drug use for life, if it meant that they would have no more student loan debt.
57.11 percent of borrowers would give up coffee for life, if it meant that they would have no more student loan debt.
4.68 percent of borrowers would move to Syria for life, if it meant that they would have no more student loan debt.
View these results how you like. That being said, we think it is clear that current student loan borrowers are feeling pressured by their debt. It is interesting to see the lengths that current borrowers are willing to go topay off their student debt. Unfortunately, none of these options are currently available under the Department of Education’s Public Service Loan Forgiveness program. Moreover,private student loan lendersdo not offer forgiveness programs.
For reference, our average respondent held $31,762 in debt at the time of the survey. This number was self reported by the respondent. In addition, 61 percent of respondents were female and 39 percent of the respondents were male. Respondent ages ranged from 22 to 61 years old. All of the respondents graduated from a 4-year college.
The Biden administration has canceled federal student loan debt for nearly 4 million borrowers through multiple forgiveness programs. Note: Data as of March 29, 2024.
More than 1 million defrauded borrowers attended for-profit or formally for-profit schools such as Westwood College, DeVry University, Corinthian College, Ashford University, CollegeAmerica, and ITT Tech, to name a few.
45% of federal borrowers owe less than $20,000 in student loan debt. 10% of borrowers owe more than $100,000. The federal government forgives student loans at a rate of $95.45 per indebted student borrower.
Credit Score Impact: Like with federal loans, defaulting on private student loans damages your credit score and the late payments remain on your credit report for seven years. Legal Actions and Wage Garnishment: Private lenders can sue for unpaid debts, potentially leading to wage garnishment if they win the case.
If you default on your student loan, that status will be reported to national credit reporting agencies. This reporting may damage your credit rating and future borrowing ability. Also, the government can collect on your loans by taking funds from your wages, tax refunds, and other government payments.
Adams tweeted “almost 40% of borrowers with student loan debt didn't finish their degree.” Three different analyses of data from the National Center for Education Statistics found that 38% to 39% of people who took out college loans between 2012-2017 didn't finish college in that period.
Today's announcement brings the total loan forgiveness approved by the Biden-Harris Administration to $153 billion for nearly 4.3 million Americans. Thanks to this Administration's efforts one out of every 10 Federal student loan borrowers has now been approved for some debt relief.
An IDR plan bases your monthly payment on your income and family size. If you repay your loans under an IDR plan, any remaining balance on your student loans will be forgiven after you make a certain number of payments over 20 or 25 years.
Atop the list is Maine Maritime Academy, where 2019 graduates who borrowed left with an average debt load of $56,897 – nearly $27,000 above the average among all ranked colleges. See: How Average Student Loan Debt Has Changed in 10 Years.
Banks often sell student loans to another intermediary, which improves their capital ratio and allows them to make more loans. Almost all student loans are fully guaranteed by the government, so banks can sell them for a higher price because default risk is not transferred with the asset.
Public and private colleges in most states can withhold your academic transcripts if you have an unpaid balance of any amount, or if you've defaulted on a student loan.
Independent undergraduates and dependent students whose parents are unable to obtain PLUS Loans: $57,500. Graduate and professional students: $138,500 (or $224,000 for certain medical training) including undergraduate borrowing.
The average student loan debt for bachelor's degree recipients was $29,400 for the 2021-22 school year, according to the College Board. Among all borrowers, the average balance is $38,290, according to mid-2023 data from Experian, one of the three national credit bureaus.
In 2013, seven in 10 (69%) graduating seniors at public and private nonprofit colleges had student loans. These borrowers owed an average of $28,400 in federal and private loans combined, up two percent compared to their peers in 2012.
Canceling runaway interest for millions of borrowers
President Biden will announce plans that, if finalized as proposed, would cancel up to $20,000 of the amount a borrower's balance has grown due to unpaid interest on their loans after entering repayment, regardless of their income.
Introduction: My name is Pres. Lawanda Wiegand, I am a inquisitive, helpful, glamorous, cheerful, open, clever, innocent person who loves writing and wants to share my knowledge and understanding with you.
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