The American Institute of Certified Public Accountants (AICPA) knows finances. After all, they’re the governing body of America’s CPA’s – the best trained accountants working in business, non-profits and government. Recently, these uber-number crunchers turned their attention to the growing student loan crisis and conducted a study to assess how we’re dealing with student loan debt.
The AICPA’s National CPA Financial Literacy Commission oversaw the study and also provides free financial literacy services on a variety of topics at 360FinancialLiteracy.org. Not surprisingly, as we have written here before, the AICPA believes one of the best ways to combat student loan debt problems is through financial education. Even for those already in debt, getting wise about money management can be a game-changer!
Here’s what the AICPA study of student loan borrowers found:
75% are making sacrifices. Three-fourths of those surveyed told AICPA that they had personally made sacrifices and/or their children had made “personal or financial sacrifices” because of the burden of monthly student loan payments. (see details on the infographic below!)
41% aren’t saving for retirement. A great number of student loan debtors are not taking care of this essential investment because of the weight of servicing their debt. This will cause unthinkable problems in decades to come when these generations retire with no financial safety net.
40% are delaying major purchases. Delays in purchasing cars were cited by 40% of respondents and 29% say they’ve delayed purchasing a house. Beyond not accumulating equity or having reliable vehicles, this is hurting our economy and road-blocking recovery from the recession.
15% are putting off marriage. Debt is changing how we structure our lives. What we’d like to know about this number is what percent that were considering marriage are delaying it. 16% said they’re postponing having children because of student loans. Wow!
39% understood student loan debt. This means that more than 60% of those surveyed did not fully understood the debt they were getting into and the impact it would have on their future. This is one of the scariest of the AICPA statistics to us!
If you’re in student loan debt, you certainly know all this already because you’re living it. Student loan debt now impacts far more Americans than it has at any other time in our history. To combat this debt, financial literacy before borrowing is key. No matter what you want to be when you grow up, there are strategies to help pay for school more affordably – whether you’re looking for tips to help pay for a degree in 3D art/design, business, engineering or any other area of interest.
Ernie Almonte, AICPA’s National CPA Financial Literacy Commission Chair, says, “Education can be a powerful investment that improves job prospects and earning potential. But the payoff is diminished if you’re also burdened by debt that takes decades to pay off. Those already contending with the financial burden of student debt should redouble their efforts to manage and eliminate it.”
If you’ve got student loan debt, the best strategy is to prioritize getting it paid off as quickly as possible. You’ll pay less in interest and be able to get on with your life without letting school costs become a burden that drags on for decades. To help get a grip on your debt, download Tuition.io’s free student loan tool to view, manage and optimize your debt!
Also check out these recent blogs on student loan debt and repayment strategies: