It’s an old saying, but particularly relevant; “To get a good job, get a good education.” It embodies a traditional set of American values, and throughout its history, this country has presented education as the key that unlocks the American dream. Today, thanks to mounting student debt, that dream is becoming a nightmare for many young people and their employers.
How bad is the problem? Students average a debt load of $26,600 upon graduation, according to The Project on Student Debt, a comprehensive study conducted by the Institute for College Access and Success. One percent of the graduating populace will acquire over $100,000 in debt and one out of ten will be strapped with $40,000 or more student loan debt.
It might not appear all that alarming, until you realize the total amount of accumulated student loan debt has hit an all-time record of $1.2 trillion, with federal sources holding the bulk.
It produces a “damned if I do, damned if I don’t” scenario in which people turn to higher education in hard times in order to gain an advantage, yet they are less able to make payments on large loans. Upon graduation, they’re often confined to low-paying jobs, and the financial stress can significantly affect their performance.
The financial burden of college loans, in addition to the additional financial responsibilities of paying rent or making house payments, utilities, car loans, and purchasing clothing, food, and other necessities, can carry on for years.
Jobs that don’t pay, combined with a lack of financial literacy to fully address financial challenges, cause debts to pile up, slowly adding to the pressures that affect workers well into their thirties and beyond.
As pressures mount, the workers’ focus turns toward their personal financial issues and away from job performance, negatively affecting productivity, profitability and the company’s overall bottom line.
Mark Singer, CFP®, AIF® is the President and Co-Founder of Financial Literacy Toolbox. Mark is a leader in the world of financial education. Mark is the author of three books, a frequent speaker at events, and is the creator of The Financial Literacy Toolbox, a virtual resource center to help financial advisors, wellness providers, and institutional retirement services firms change the conversation about financial wellness.
