New research shows college graduates aged 35 and under with student loans now are spending nearly one-fifth of their current salaries on student loan payments and that 60 percent expect to be paying off student loans into their 40s.
The research by Citizens Bank, which has locations throughout Connecticut, also found fewer than 50 percent have looked into refinancing options to lower their monthly payments, consolidate their private and federal loans or otherwise improve the terms of their loans, according to the bank’s Millennial Graduates in Debt survey.
Citizens cited research by The College Board, which said the cost of college has increased 13 percent for public four-year colleges, and 11 percent for private, nonprofit four-year college in the last five years.
Of those that took the Citizens survey, 77 percent said they had received federal loans. One third of respondents said they had received private student loans, which typically are smaller and in most cases require a credit-qualified co-signer.
“As this generation of college graduates starts to contemplate future life events like home purchases and retirement, it becomes increasingly important for them to take control of their college debt, whether it’s through refinancing or other tactics that can help them limit its impact on their overall financial health,” said Brendan Coughlin, president of Consumer Lending for Citizens Bank.
The Millennial Graduates in Debt survey found graduates with student loans grappling with the trade-offs required to make their student loan payments every month:
- 54 percent have limited their travel;
- 50 percent have limited their shopping for clothes, shoes and accessories;
- 46 percent have limited their spending on entertainment and social events;
- 45 percent have limited their spending on eating out; and,
- 40 percent have limited the amount they can spend on rent or mortgage payments
The survey also found some Millennials now express buyer’s remorse regarding their college investment, with 57 percent saying they regret taking out as many student loans as they did. More than one-third (36 percent) of Millennial graduates with student loans said they would not have gone to college if they had known how much it was going to cost them.
