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- Student loan debt is higher than ever, and millennials are struggling to deal with it.
- Two new studies take very different approaches, but come up with the similar conclusions: It’s far from uncommon to be juggling expensive student loans.
- About a quarter of millennials are spending over $300 a month on their student loans, and are spending more on loans than basic necessities.
- Visit Business Insider’s homepage for more stories.
Student loan debt is one of the big factors standing in the way of millennials making the progress their parents’ generation had. Many have said they’ve put off major life events like getting married, starting a family, or buying a house because of their debt.
While new studies from JP Morgan Chase and Student Loan Hero take different approaches to gathering and analyzing data, the two sets of data draw very similar conclusions. Both sets of data show just how dire the student loan problem has become in the US.
The JP Morgan Chase study looked at 39 million accounts which showed electronic transfers for student loan payments between October 2012 and July 2018. This study was able to include families who may be paying on behalf of students, as well as show how liquid assets, spending, and other habits changed.
The Student Loan Hero survey looked at 533 responses from those who had graduated within the past five years.
If you’re struggling with student loan debt, these studies’ findings make it clear: You’re not alone.
1. The surveys agree: About a quarter of borrowers pay over $300 each month
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Student Loan Hero found that about 21% of respondents paid over $300 per month for their loans, while Chase found 25% of families spent more than $329 per month on student loans.
2. A full 78% of graduates said their student loan balances hindered their lives
Reuters
In Student Loan Hero’s recent study, 78% said they felt hindered by their monthly payments. About 30% said they’d given up going out with friends or saving for retirement to make payments, while 44% said they’d given up traveling.
3. One in four families spends 11% or more of their take-home pay on loan payments
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The Chase study also concluded that one in four families is spending 11% of their income or more on loan payments.
Income-driven repayment plans are available and are meant to cap student loan payments at 10% of your discretionary income, calculated as 1.5 times the poverty guideline for your family size.
But, as so many people are spending more than 10% of their total take-home income on loans, it seems that these repayment arrangements aren’t benefiting as many families as they should.
See the rest of the story at Business Insider
See Also:
- The 21 best-value colleges in the US, based on what students earn in the workforce years later
- How to save money in college to graduate with smaller student loans
- Amex Platinum vs Amex Gold: Which rewards credit card is better for you?
Source: Business Insider – feedback@businessinsider.com (Liz Knueven)