Nothing has stifled the American Dream quite like student loan debt. Instead of looking forward to buying their own home and starting a family, a whopping 23% of Millennials are still living at home with their parents. 1 Student loan debt is the second biggest source of household debt, following mortgages. On an individual basis, Americans have more student loan debt than credit cards or auto loans.
The massive influx of student loans is one of the largest contributing factors for financial dependency. The average graduate from 2017 walked away with a degree and $39,400 debt—a 58% increase over the last decade.3 And if you combine the student loan debt of the 44.2 million U.S. borrowers you get a total of $1.5 trillion.2
Not only is student loan debt at an all-time high, but “monthly student loan payments have also increased. The Federal Reserve (Bank of Cleveland) estimates that the monthly student loan payments have increased from $227 in 2005 to $393 in 2016.” 4
What’s more, student loans aren’t only contributing to Millennials’ financial capabilities when it comes to large financial purchases, they’re also affecting the retirement funds and quality of life of their parents. Today, 55% of parents have over $40,000 in debt used for their children’s education. Sixty percent of parents expect to help their kids pay off student loans, and 40% end up paying it all–a large portion of which comes from their retirement savings.5
The cost of attending college is an ever-growing burden with massive economical setbacks for many households across America. However, most people (parents and students alike) don’t regret taking out loans for an education, [but] there seems to be a lack of understanding in regards to refinancing, loan forgiveness and other repayment options.5 Fortunately, financial institutions like Pioneer Bank are using data tools to identify and offer competitive interest rates on student loans that can help ease the burden of the rising debt for college grads.