Freedom usually comes with the experience of college students receiving their diplomas. College, however, continues to haunt graduates even after their achievements through student loans. A Bankrate survey reveals that a majority of college graduates tend to delay buying new homes because they have to pay off their student loan debt.
The survey also reveals that 73 percent of graduates have to delay about one or two life milestones because of student loan debt. Of the people who need to pay loans, 23 percent chose to delay buying their own homes. Student loan debt also forces graduates to sacrifice saving for retirement, emergencies or paying for another debt.
Bankrate senior economic analyst Mark Hamrick believes that students and families can find ways to help pay for education. Hamrick also urges people to entertain alternative options when seeking financial aid, including scholarships and grants.
Credible, an online financial aid marketplace, reveals that student loan debt reached an average of $33,310 in 2019. Bankrate was able to have 3,885 respondents last February. Hamrick believes that the student loan debt is taking its toll on individuals, with the US economy also suffering from it. Hamrick also deems it necessary for the American population to find ways to save for major life decisions like retirement and emergencies while trying to pay off debt.
Due to the massive dent in their budget as college graduates, a majority of millennials suffering from student debt reveals that they regret some of the financial decisions they made during their school days. Thirty percent of the respondents would love to apply for a scholarship, while 19 percent of them would choose to go to a community college instead. Eighteen percent of the millennials with student loan debt revealed that they would have considered going to another university.
Vice President for retirement and college leadership Melissa Ridolfi reveals that her company, Fidelity Investments, is focused on educating parents about their kid’s funds for college. Ridolfi encourages parents to save money as early as possible and to dedicate a bank account for college fund like a 529 plan. Ridolfi shares that percent of her company’s clients that have children had started on a college fund before the kid turned two years old.
Fidelity Investments also helps families raise money for their child’s 529 plan via a gifting platform, where people can donate money similar to how the online fundraising platform GoFundMe works. Ridolfi feels optimistic that her company is reaching its mission to help clients save early for education.