Roughly 60 percent U.S. adults who have held student loan debt have put off making important financial decisions due to that debt, according to a new Bankrate survey. For Gen Z and millennial borrowers alone, that number rises to 70 percent. Student loans have prevented these borrowers from saving for retirement or emergencies, buying a home or paying off other debt, like credit cards.
Despite this, a majority of U.S. adults with student loan debt say that their degree has unlocked career and salary opportunities that wouldn’t otherwise be possible, highlighting the complicated relationship that many Americans have with their student loan debt.
Here are the key findings:
Most American adults say that student loan debt has delayed other financial decisions
Of the U.S. adults surveyed who currently hold or have previously held student loan debt for themselves, 59 percent say that they have delayed financial milestones due to their student debt. Emergency funds and retirement savings have taken the biggest hit, with 27 percent of respondents delaying saving for emergencies and 26 percent of respondents delaying saving for retirement.
Age also plays a large factor in financial priorities. Younger borrowers are more likely to stall important financial decisions than their older counterparts; 74 percent of Gen Z borrowers (age 18 to 25) and 68 percent of millennial borrowers (age 26 to 41) have delayed financial decisions, compared to 54 percent of Gen X borrowers (age 42 to 58) and 42 percent of baby boomers (age 58 to 76). Among younger generations, Gen Z respondents say that they’re most likely to delay buying or leasing a car, while millennials are most likely to put off bolstering their emergency fund and buying a house.
However, there are commonalities across age groups. In each generational category — with the exception of the silent generation (age 77-plus) — roughly 25 percent of respondents report delaying saving for retirement, saving for emergencies and paying off other debt.
However, Bankrate Chief Financial Analyst Greg McBride cautions borrowers against postponing other debt payments, especially credit card debt. “Debt repayment should prioritize high-cost credit card debt, especially relative to federal student loans, which carry many favorable provisions unavailable on other debt, such as deferment, income-based repayment or debt forgiveness in certain instances.”
Nearly 6 in 10 degree-holders say that college has been beneficial to salary and career growth
Despite most borrowers saying that their debt has held them back from making important financial decisions, 59 percent of degree-holders say that their higher education opened up career opportunities and increased their earning potential. Only 17 percent say that higher education hasn’t had much of an effect, and 19 percent say that it has had no effect.