Katie Brazis
June 2017

People Saying “No” to College Because of Student Loans

The numbers speak for themselves:

  • There is $1.41 trillion in student loan debt held by 44 million Americans.
  • Two-thirds of college students graduate with student debt.
  • About 21 percent of households have student loan debt.
  • The average amount of debt held is $30,100.
  • In 2016, 1 million loans defaulted.

These facts might make anyone hesitate to take out loans to fund their post-secondary education, but research shows that certain groups of people are more averse than others when it comes to taking out student loans. And it turns out those who are averse would benefit the most from a college degree.

According to a study led by Angela Boatman and Brent Evans, financial literacy had a great influence on whether a student decided to take out student loans. Participants in the study who had higher financial literacy and knowledge of federal student loans were up to 50 percent less likely to experience aversion. Alternately, lower financial literacy and experience with payday lending (short term lending used primarily by low-income workers) resulted in higher aversion to student loan borrowing.

Despite the results of the study, a college degree would be beneficial for those most averse to borrowing money for education. “On average, the individual returns to college enrollment and completion are large, with gains in income of around 10 percent for each year of postsecondary education,” Boatman said. If those averse to borrowing knew how much they could benefit, they may just take the risk and trust the returns will exceed the costs of paying of the debt.

It seems that those who are averse could use some more information, but they’re not getting it. While trying to figure out why, my research yielded results about academics and not finances. When people write articles about how high schools are preparing, or failing to prepare, students for college, they only talk about academics.

When there is advice about talking to high school students about how to pay for college, it falls on the parents, who may themselves be averse to taking out higher education loans because of the reasons above. It’s a cycle that may need outside intervention to break.


Options are available to help

Most people do not realize that there are programs designed to help those who may be struggling with their student loan payments. Thousands of borrowers have trusted Ameritech Financial to be their advocate. Click here to find out what options are available. Our services could help you get back on track.

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Katie Brazis

Katie is a Content Coordinator with a BA in English and a Certificate in Editing and Publishing from CSU, Chico, and a Certificate in Copyediting from UC San Diego Extension. In addition to her professional history in editing, she has a deep love of stories. In her free time — when she’s not trying to tame the wild beast she calls her cat — Katie consumes stories in any form. She reads books and watches shows and movies. She plays cooperative games, both video and board, with her husband and friends. When she chooses to venture outside she keeps her phone handy to catch some virtual Pokemon.

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