Cartoon by Daryl Cagle, MSNBC.com
This week’s blog is all about student loan debt. Unfortunately, many students head off to college without learning how taking on student loans can negatively affect their future financial life and all the effects that come with the loans.
For the class of 2016, the average graduate has a whopping $37,172 in student loan debt. Graduates with advanced degrees carry an even larger debt load, averaging $42,000 for an MBA to over $160,000 for degrees in medicine and health sciences.
Cartoon by Bob Englehart, Cagle Cartoons, The Hartford Courant
The consequences and effects of these large student loans affect more than just the student borrower. When the graduate is unable to pay for his/her living expenses plus make payments on the loans, there can be ripple effects through the economy.
- The graduate may find it necessary to move in with his/her parents. Not only can this be demeaning to the graduate, it can upset the lives and routines of the parents.
- The ripple goes on as there is now a landlord no longer collecting rent on that apartment or home.
- In addition, the graduate will find it much harder to purchase a car or a home. These major purchases will have to be delayed until the graduate increases their income enough to take on the extra expense or until the student loans are paid. Either of these options could be years in the future.
- Delayed purchase of vehicles and homes could negatively impact the job market.
- The ripple goes on and on.