The student debt crisis is reaching a breaking point — and many grads are regretting their pricey degrees.
A new study from the FINRA Foundation found that almost half of Americans with student loans wish they’d chosen a less expensive college, compared to only 9% among those who did not graduate with debt.
“What we’re seeing is that there is buyer’s remorse when it comes to taking out loans for college,” FINRA Foundation’s Gerri Walsh told Yahoo Finance in a recent interview.
“Too many Americans don’t understand how much the true cost of college is and, as a consequence, when they’re faced with all that debt they wish they’d gone to a less expensive school,” she added.
Currently, student loan debt has topped $1.5 trillion, making it the largest type of consumer debt outstanding other than mortgages, according to the Center for Responsible Lending.
Increased pressure surrounding student loan forgiveness is now pushing politicians and CEOs to weigh in.
2020 Democratic hopeful Bernie Sanders recently unveiled plans to cancel $1.6 trillion of student loan debt for approximately 45 million Americans.
Meanwhile, JPMorgan Chase (JPM) CEO Jamie Dimon told Yahoo Finance’s Andy Serwer that student lending in the U.S. is a “disgrace” that’s “hurting America.
Walsh told Yahoo Finance that there’s “absolutely” a role for both businesses and policymakers to play when it comes to finding a solution.
“College is a doorway to the American dream for so many...but we can’t saddle future generations with that level of debt without having an impact on the economy,” she added.
Grads trapped in a ‘cycle of debt’
Student debt holders are more likely to engage in expensive credit card behavior — becoming trapped in an unforgiving “cycle of debt,” Walsh said.
“One of the realities of having that much student loan debt is it impacts your finances for quite a long time,” she explained.
“In a lot of ways it’s a negative inheritance for your future children because you’ve set yourself back,” Walsh added.
“The best thing that you can do is try to sort out your debt and figure out the most expensive loans you have to pay and pay those off first so you’re more likely to keep up with your day to day expenses,” she advised.
Alexandra Canal is a Producer at Yahoo Finance. Follow her on Twitter: @alliecanal8193