The Student Loan Debt Reality in America

Putting a Face to the Student Loan Debt Crisis

Student loan debt is a reality for 44 million Americans.1  On average, each of them owes just over $35,000 in student loan debt.2 Wow. That kind of debt is affecting all aspects of their lives, even when or if they get married.3 And to make matters worse, it takes the typical borrower 20 years to pay off their student loans.4

Those aren’t just stats—they’re your employees. And as we mentioned, student loan debt is only part of the story. To really understand the problem, you have to look closer at what else people are dealing with.

Understanding Their Crisis

That means they would probably go even deeper into debt just to get by during a financial emergency.

It goes without saying, but we’re going to say it: This crisis is dire. And unless your workers make a change in their money habits, things will likely only get worse.

 

Borrowers Are Falling Behind

Many borrowers are living like a hamster on a wheel. Either they’re trying hard to make progress but aren’t getting anywhere, or they’re desperately holding on, trying not to get thrown off. Their paycheck-to-paycheck lifestyle and lack of emergency savings sets them up to fall behind on their student loan payments when even the slightest money emergency strikes.

The Money Stress Cycle

In fact, of America’s open student loans, 10.8% are 90 days or more past due or in default. That’s nearly five million people! And it’s worth noting that almost half of all student loans are in some sort of non-repayment cycle, which means they’re either deferred, in a grace period or in forbearance. That means the 10.8% only shows half the picture when it comes to borrowers who are seriously struggling.8

That's a big problem.

And it’s a problem that many thought would never come. They were given false promises that led them to believe things would never get this bad.

1. Roosevelt Institute, 2018
2. Experian, 2019
3. Ramsey Solutions, 2019
4. U.S. Department of Education, 2020
5. CareerBuilder, 2017
6. Federal Reserve, 2019
7. Brookings Institute, 2018
8. Federal Reserve Bank of New York, 2020