I read something crazy this week about how young Americans feel about all their credit card balances and the student debt they’ve racked up.
Apparently, the majority of them feel “empowered” by all that money they owe lenders. The average student loan borrower, who graduates from college, owes $23,000 or $24,000. And the typical graduating senior with one credit card has a balance of more than $4,100.
Here’s the part that I can’t wrap my mind around: The more college and credit card debt a young adult has, the more control they feel over their lives. Debt, in other words, is a positive not a negative.
“Empowered” isn’t the word I’d think of if I was leaving college owing $28,000. And yet this is the amazing finding of a new study conducted by researchers at Ohio State University that relies on data from the Bureau of Labor Statistics. I read about this study in The New York Times. Here is a blurb from the report:
Borrowing for college is going to be inevitable for about two-thirds of college students, but I think these young adults should focus on borrowing only what’s absolutely necessary. Oftentimes that’s not the case. And when they graduate they need to make repaying these loans back their No. 1 financial priority. Mishandling student loans — and credit cards — can only get them deeper in the hole.
Borrowing doesn’t seem like a big deal when you’re 18, but the reality becomes all too real a few years later. Most end up experiencing problems repaying their student loans. I wrote a post about this alarming fact earlier this year: