Thursday, August 7, 2014

Student Loans ... Satisfying Today's Desires Too Often Brings on a Lifetime of Negative Effects

Student loans for attending college have reached historic levels and are becoming larger each year.

Some attendees graduate, and then go on to good jobs, and some don't.
But too many leave college with debt burdens that will haunt them for years.

So while tuition costs continue to escalate, the harm imposed by the student loan debt burdens last well into, and perhaps through, adulthood.

A new study has the gruesome details in College Loans Are a Burden Long After Graduation, Poll Finds:

"People who take out significant college loans score worse on quality-of-life measures, a trend that persists into middle age, according to a recent poll of college graduates.

Even 24 years after graduation, students who borrowed more than $25,000 are less likely to enjoy their work and are less financially and physically fit than their counterparts who graduated without debt. For more recent college grads, the discrepancy is even more pronounced.

"These results offer a new dimension of how college debt affects the rest of your life and it gives us more cause for concern," said Brandon Busteed, executive director of Gallup Education, which conducted the poll in conjunction with Purdue University. "It's bad for all aspects of your life."...

The five categories in the questionnaire assess whether people feel that they have purpose to their lives, supportive relationships, financial security, a sense of community and physical well-being. Those who finished college between 2000 and 2014 with more than $50,000 in debt were significantly worse off in all five categories than those who graduated with no debt....

The amount of debt students are taking out to get through college has been climbing for years. About 70% of college graduates have debt. The average debt today is more than $33,000, up from $18,600 in 2004....

Mr. Busteed said high debt could undermine people's sense of purpose by prompting them to take jobs that pay more rather than ones they are really interested in. It might also deny them the flexibility to leave and try something new.

High debt also postpones buying a home and getting married, which could delay connecting to a community. And debt creates stress that can hurt physical health.

The longer-term implications may be rooted in the fact that those who graduate with considerable debt may have put off saving for retirement, which could generate additional anxiety."

Summing Up

Borrowing excessively for college, or anything else, is harmful to our economic health and well being.

Getting an education is helpful to our economic health and well being.

And obtaining that college degree need not be followed by a lifetime of regret due to indebtedness incurred while pursuing that education.

All too often we ignore the best interests of our "future self" and adopt the eat, drink and be merry habit of satisfying the desires of our "present self."

And then we pay -- and pay -- and pay some more.

That's sad.

And that's my take.

Thanks. Bob.

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