While previous student debt cancellations implemented by the Biden administration benefited some, they didn’t even reduce the debt incurred by many others, a new study finds.
Of the 2,000 U.S. participants surveyed in a survey conducted by the ELVTR online learning program, 63 percent of Americans are still struggling with student loan debt.
And 54% of respondents say their mental health problems are directly related to this debt.
Nearly 2% of student loan debt has been forgiven by the Biden administration. It is the most relaxed of any presidential administration in American history.
In total, nearly $32 billion in loans have been forgiven since President Biden’s term began.
Additionally, the Biden administration’s more sweeping plan — announced in August — would relieve working- and middle-class borrowers of up to $10,000 in student loan debt, and Pell Grant recipients in the same income bracket could see up to $20,000 off your student debt.
Yet the average student attending a public university in the US borrows $32,880 to earn their bachelor’s degree, according to the Education Data Initiative. And tuition prices continue to rise, says Roman Peskin, founder and CEO of ELVTR.
“With the cost of college rising faster than inflation, the situation is only getting worse,” Peskin told CNBC Make It.
Nearly two-thirds of those surveyed can barely afford or can’t afford their loan payments, with minorities such as black borrowers facing the most debt.
The survey found that 79 percent of black and African-American respondents were either completely unable or unable to afford loan payments. Nearly 70% of the women surveyed are also struggling or unable to meet the costs of their loan payments.
Anxiety is the leading mental health condition resulting from student loan debt, study finds.
But some people experience other mental health problems that they attribute to their student loan debt:
Here’s a deeper dive into the numbers:
- Anxiety (56%)
- Depression (32%)
- Insomnia (20%)
- Panic attacks (17%)
- Other mental health conditions (10%)
Additionally, over 80% of participants said student loan debt delayed a major life event. These are some of the really important ways that loan payments have impacted students’ lives:
- Delayed expenses (ie buying a property or a car) – 64%
- Delayed saving – 60%
- Delayed journey – 53%
- Delayed starting a family – 32%
- None of the above – 16%
“Before we bandage the wound, we must sew it up”
Almost 60% of Americans surveyed are unhappy with their choice to borrow money to pay for their college education and either regret doing so or doubt it was a good investment.
When reflecting on their choice of higher education, many people indicated what they would do differently if given the chance:
- 28% would choose another field
- 25% would spend less on education
- 23% are satisfied with their choice
- 13% would study at another school
- 7% would not go to college
- 4% would spend more on education
And perhaps borrowers are having trouble making their decisions because more than half of the participants who earned a college degree make less money than their friends without degrees.
As a result, there are likely to be more people changing careers in the future, as only 27% of respondents plan to stay in their current industry.
“Loan forgiveness, while a great initiative, is really just a Band-Aid – before we can bandage the wound, we have to sew it up first,” says Peskin.
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