Weighing in at more than $1 trillion, student loan debt is now larger than total credit card debt. Morning Editionrecently asked young adults about their biggest concerns, and more than two-thirds of respondents mentioned college debt. Many say they have put off marriage or buying a home because of the financial burden they took on as students. [...]
On how student debt keeps individuals from building personal wealth
People with outstanding student debt who've graduated from a four-year college have about 60 percent less net worth [than those without debt]. They have about 40 percent less equity in their homes, and they have about 52 percent less in retirement savings. They're better off than if they didn't go to college, but they're not doing nearly as well as they could be, and as their peers are doing, if they have no debt. ...
[Demos, a think tank, and] Robert Hiltonsmith did a study on post-college outcomes around debt. And [they] found that while students with ... and without college debt start off at similar levels of income, by the time they're 40 they have less income if they have student debt. ...
[That's because] these people aren't investing in the kinds of assets that also produce income in the long run. So they're not buying real estate, they're not buying stocks, they're not buying bonds — all kinds of things that not only produce asset wealth, but income wealth. And so you have this large divide now between those who have debt and those who don't have debt.
Read the study: At What Cost? How Student Debt Reduces Lifetime Wealth
