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One-Third of Americans Fear They'll Never Repay Their Student Loans

By Maurie Backman - Oct 29, 2017 at 2:18PM

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Are you one of them?

If you've been following the news, you're no doubt aware that the country is deep in the throes of a student debt crisis. Americans collectively owe upward of $1.4 trillion in loans, many of which stem from private lenders with crippling interest rates. And while the practice of borrowing for college has long existed, the problem has gotten worse in recent years.

Student loan debt climbed 250% over the past decade, leaving the average borrower on the hook for $26,700. The typical class of 2016 graduate, meanwhile, owes $10,000 more than that. It's not surprising, therefore, that 36% of Americans fear they'll never shake their student debt, according to a recent COUNTRY Financial study. And sadly, they're probably right, to an extent.

Graduation cap on a pile of 100-dollar bills


Not only is student debt causing countless younger workers to put off buying homes, but it also explains why over 16 million Americans have a negative net worth. And if we don't all pledge to put a stop to the madness, we're going to see a lot more people carrying their student loans with them to the grave.

Is all of that debt really worth it?

Given the cost of college today, many students and their families have no choice but to rack up debt to afford those hefty tuition costs. And although 66% of Americans agree that it's worthwhile to take out loans to fund a degree, many fail to recognize the repercussions that might ensue once those loan balances start to climb.

For one thing, student debt has been shown to stunt retirement savings. A Morningstar study reveals that for each dollar of student debt you accumulate, you risk setting your nest egg back by $0.35. This means that if you're like the average Class of 2016 graduate with $37,172 in debt, you might wind up with over $13,000 less in retirement. Furthermore, this calculation applies regardless of your age or income level, which means that even eventual high earners stand to get hurt by student loans.

Another problem is that many students have no choice but to borrow privately for college after exhausting their federal loan options. Those who go this route not only face high interest rates but also get little leeway with regard to repayment.

But make no mistake about it -- federal loans are no picnic, either. As of 2015, roughly 11.3% of borrowers were in default on their federal loans, despite their lower interest rates and more flexible payment options.

Of course, whether or not student loans are actually "worth it" is a question most college grads don't have the luxury of asking. If they want those degrees, then borrowing money is often the only option. But that doesn't mean future students can't take steps to keep that borrowing to a minimum.

Keeping your college costs down

Though it may be impossible for most students to avoid debt entirely, there are options for minimizing the cost of a degree. For one thing, choose a school with the lowest tuition available. Generally, this means community or in-state public college.

The following table shows what tuition looked like, on average, for the 2016-2017 school year:

College Type

Average Cost of Tuition



In-state public


Out-of-state public





Going the in-state public school route can save you over $15,000 a year on tuition alone compared with out-of-state school, and almost $24,000 a year compared to private school. Furthermore, if you're willing to commute instead of dorm, you'll shave $10,000 or more per year off your total higher-education costs.

Working while studying can also help keep your college costs to a minimum. Many schools offer work-study programs where you're given an on-campus job that can help defray the price of tuition. Another option? Choose a major and stick to it. If you graduate on time, you'll spend less money than those who fail to wrap up their degrees in four years.

Finally, regardless of how much your college of choice ends up costing, be smart about the way you borrow for it. Limit yourself to federal loans if possible, or consider postponing college for a year or two and working beforehand to save up some money. This way, you won't have to borrow as much.

Though student debt might seem like an unavoidable side effect of attending college, the truth is that it is within your power to keep your loans down. And if you don't, you'll risk joining the ranks of those who worry about carrying that debt indefinitely.

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