Photo (cc) by Cory M. Grenier
The majority of college students graduate with some level of student loans these days, but paying off a huge mountain of debt is becoming a harsh reality for many millennials.
In fact, according to a new survey from Citizens Bank, millennial-aged graduates are spending a whopping 18 percent of their salary on student loan payments. The survey found that 60 percent of millennials expect to be making payments on their student loans well into their 40s.
Although the U.S. Department of Education has calculated the national average for student loan debt for college grads at $29,400, a Citizens Bank survey found that average student debt for millennials is much higher — roughly $41,286.
Despite that sizable average, 15 percent of the grads surveyed said they didn’t know their total student loan balance and more than a third of grads (37 percent) reported being clueless as to their loans’ interest rate.
Yet even while facing sometimes burdensome loan payments, a large share of millennials are unwilling to prioritize student loan repayment over spending on luxury and quality-of-life items.
For example, when asked what they’d be willing to give up in exchange for lower student loan payments, this is what the survey revealed:
- Less than half (45 percent) were willing to cut what they spend on eating out.
- Just 46 percent said they’d cut their entertainment and social event expenses.
- A mere 40 percent were willing to limit their housing expenses (rent or mortgage).
- Only half of millennials were willing to slash their spending on clothes, shoes and accessories.
“They are very committed to living their life the way they want to live their life, and as frustrated as they are by student loans, they are not willing to make those lifestyle trade-offs,” said Brendan Coughlin, president of consumer lending for Citizens Bank.
At the same time, more than half of millennials reported regret over how much they borrowed to attend college. And a startling one-third of grads said they would have skipped college altogether had they grasped how expensive it would be in the end.
“Unfortunately, the long-term cost of college is leading some graduates to question the value of their investment — in many cases, before they have fully explored their opportunities to significantly reduce their payments,” Coughlin said
Are you overwhelmed or do you have questions about your student loan debt and repayment options? We can help. Check out “Ask Stacy: What Can I Do About My Student Loan Debt?” Also, click here and we’ll help match you with a reputable expert that can help you make a plan for getting out of student loan debt.
Are you — or your children — paying on student loans? How much of your annual salary are you forced to fork over for loan payments? Share your college loan experiences below or on our Facebook page.