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Why Are Student Loans a Problem?

Chloe Bennett • • 7 min read
Why Are Student Loans a Problem?

Loan Debt Is an Economic Drag
Despite their qualifications, grads often have to settle for lower-paying, lower-skill jobs just so they can start paying their loan bills right away. As a result, graduates in debt often miss out on the benefits that come with a degree.

How are student loans a problem?

Student loan debt has topped $1.5 trillion in recent years, making it the largest type of consumer debt outstanding other than mortgages. The average student loan borrower graduates with nearly $30,000 in debt. The CFPB estimates that over 1-in-4 borrowers are delinquent or have defaulted on their student loan debt.

Why are student loans harmful?

Plus, the high amount of debt compared to a lower salary can produce a skewed debt-to-income ratio, which can hurt your credit. Unaffordable student loan debt can lead to delinquency and even default, which can ruin your credit score and prevent you from getting approved for other types of credit.

Chloe Bennett
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Chloe Bennett

Chloe Bennett explores the intersection of pop culture, streaming entertainment, digital trends, and contemporary lifestyle. Her weekly commentary reaches thousands of culture enthusiasts.