Why student’s loans aren't all that scary
Worry over student loan is misguided, as recent researches from TransUnion state that today’s college graduates are not only paying off student debt, but getting approved for new mortgages and automobile loans as well. This research happened as a reaction to the worry expressed over the growing national student loan, which has now surpassed the $1 trillion mark.
The analysis done on the credit reports of student loan borrowers between the ages of nineteen and twenty nine concluded that recent graduates with student loan debt are not that far behind their non-debt classmates in applying for and getting loans to invest in purchases such as homes and new cars although the study did not mention the reason why recent college grads with debt are getting approved for new loans.
According to the recent reports, after the first few years of graduation, graduates with and without student debt had very similar rates of credit activity and those who graduated with student debt were also less likely to be late on payments for car or credit card loans.
Charlie Wise, vice president of Trans Union’s Innovative Solutions Group and co-author of the study stated that the turbulent time of recession over the years in which the study took place were responsible for shifting the age group’s credit activities as a whole, and that it didn’t matter if a graduate had student loans or not.
However, student loan debt is having an effect on the buying decisions of recent college graduates. A survey from American Student Assistance found that 27 percent of graduates said it was hard to purchase daily provisions because of overwhelming student loans, while 75 percent said student loan debt was impacting their decision and ability to purchase a home or an automobile.
Paul Combe, president of American Student Assistance, contributes that “Logic will tell you that student loan debt has to affect the ability for people to purchase”.
Harriet Brackey, an investment officer at GFK Wealth Advisors says that it is anomalous and not customary, that some graduates can manage their student debt while also meeting financial goals, like getting mortgages and purchasing homes.
Brackey adds that some graduates with student debt are limited in what they can buy because the debt they receive from new loans is combined with their student debt, making it hard for them to budget.