Student loans are such a burden for Americans that 71% of a surveyed group of borrowers say they’ve delayed a major life milestone due to their debt.
That’s according to a recent Gallup and Lumina Foundation report, which found borrowers have postponed major purchases including homes (named by 29% of respondents) and cars (28%). Debt has also led borrowers to delay moving out of their parents’ homes and put off having children.
The survey, released earlier this month, polled current college students as well as previously enrolled students who stopped before completing a degree. Among the group of borrowers who paused their education, 35% say they haven’t re-enrolled due to their student loans.
Borrowers ages 26 to 35 are the most likely demographic to have delayed a milestone. This may be because that group is at a “life stage in which these [major] events are more relevant than for younger borrowers,” and their debt loads are typically higher than those of older borrowers, according to Gallup.
While higher debt balances are strongly correlated with a greater chance of delaying life events, most borrowers with smaller debt amounts have still been impacted by their debt. The survey found that 63% of borrowers with less than $10,000 of student loan debt have delayed a life event.
Student loan forgiveness updates
For several years, tens of millions of Americans had a break from their federal student loan debt obligations thanks to COVID-era forbearance. Now that payments are back, the new data from Gallup and the Lumina Foundation underscores the significant challenges that borrowers are facing.
Lawmakers have been trying to address this issue with mixed results. Most notably, President Joe Biden’s first major effort at widespread loan forgiveness was struck down by the Supreme Court in June, but the administration is taking another crack at it with a new loan forgiveness plan that’s narrower than the first (though still massive in scale).
The new forgiveness initiatives, which were announced earlier this month, would cancel an estimated $150 billion worth of student loan debt, benefitting some 30 million borrowers. The administration’s plans, which will almost certainly face legal challenges, would provide forgiveness for borrowers dealing with runaway interest and financial hardship. Other borrowers who’ve been paying their loans for more than two decades would also get forgiveness.
Separately, piecemeal student debt relief programs that have been enacted to date during the Biden administration have resulted in relief for more than 4 million borrowers.
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