Student Loan Debt Affects Net Worth

net worthIt has been reported that those with a college education make many times over what those without a college degree earn, that also means that degree came with a price tag. Not only are graduates making more, they owe more; and owing more is dragging down their net worth.

Slippery Slope

The average college graduate is moving back home, working full-time, driving their old car, skipping vacations and nights out with their friends; all for the purposes of eliminating their student loan debt burden a little faster. So how is all of this sacrifice not resulting in a better future? Until that debt is paid off, it means that their net worth is far below that of non-borrowers.

College educated borrowers have a net worth 7 times less than graduates without student loan debt.  Less net worth and increased debt means problems with securing additional credit. Most debt carrying borrowers will find they aren’t eligible to buy a new car, let alone take out a  mortgage. Many debt-carrying graduates  brave enough to start their own small businesses are also finding it difficult to obtain small business  loans when needed.

While this may sound like a deterrent from attending college, the net worth of a degreed, non-borrower is still 6 times greater than a non-graduate. So that means that the value of a college education still holds, it’s just avoiding debt along the way that counts.

Read more: http://www.nwherald.com/2014/06/13/student-debt-weighing-on-young-americans-net-worth/ax92s7v/