How the student debt crisis affects the economy - NBC12 - WWBT - Richmond, VA News On Your Side

How the student debt crisis affects the economy

Source: NBC12 Source: NBC12
RICHMOND, VA (WWBT) -

$10 million ... that's how much student loan debt grows in this country each hour. That $1.3 trillion, owed by millions of Americans, is happening to more than just recent graduates.

Brent Ashley may be 25 years old, but he's already thinking about his future.

"I want to be as financially healthy as possible. I want to have a great retirement. At 25, you can never think about it too soon," said Ashley.

Thinking now, for his future family, car and the house he'll one day buy.

"I want to be able to have a good home. I want to be able to start a family these are things that I am absolutely already planning on pushing back," said Ashley.

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Delaying the American Dream is happening to millions of Americans right now. They get out of school, can't find a job right away and realize they owe hundreds of dollars in monthly student loan payments.

"This bubble is going to burst in the living rooms of families across the country," said Alan Collinge, who runs Student Loan Justice.org and believes the student debt burden is a serious problem, not just for recent grads, but for the entire economy.

"We're already seeing family formation is being stalled, major life purchases, homes even automobiles stalled. People are taking employment they would otherwise not want to take," said Collinge.

The National Association of Realtors recently surveyed people paying back their loans and 71 percent cited student loan debt as the number-one factor delaying them from buying a home. Often because they can't save for a down payment.

"My debt now is pushing about $165,000," said Ashley. He feels the weight of it, every day.

Ashley graduated from Virginia Tech's vet school but realized how much more school and debt was ahead of him, and how little he'd make when starting out. So, he switched paths. He's now at the University of Richmond getting his law degree and an MBA.

"It's horrific for those students to be in that situation. Shouldn't have that much debt," said Debbie Cochran. She’s with the Institute for College Access and Success. She says saddling 18- and 19-year-olds with major debt decisions is irresponsible. Many don't realize the enormity of the monthly payments until years down the road.

"They're not going to be as financially healthy or stable and they're not going to be able to buy a home. For all this is the great American investment. The one thing you can count on that I'm not going to be able to get into for a long time," said Ashley.

Brent's not only worried about his future. He's worried about the economy once the Baby Boomers retire and his "debt" strapped generation is leading the way.

"It tremendously effects everybody in the country. You're talking about the housing market going down. You're talking about less money to invest," Brent said.

"I hope the answer isn't that fewer people need to go to college," said Ashley.

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