Student loans can be both a blessing and a curse.
On one hand, they enable students to cover the costs of college and earn a degree, which remains a valuable asset in today’s job market.
But on the other, student loans can drag down a borrower’s finances, creating a heavy burden that often lasts a decade or more.
Given the complex nature of student loans, Student Loan Hero wanted to find out how real borrowers feel about their student debt. We surveyed more than 1,000 Americans across many generations to find out if they regretted taking on debt to finance their education — and whether or not they’d encourage their kids to do the same.
- 46% of millennials who borrowed for their educations don’t want their kids to do the same. The same is true for 39% of Gen Xers.
- 1 out of every 3 borrowers regret taking out a student loan.
- 40% of millennials and 39% of Gen Xers regret taking on student loans.
- 1 in 4 regret how they’ve handled their loans
- 69% of those who are not in good standing on all their loan repayments regret taking on debt, and 63% think they handled their debt poorly.
- Overall, people who didn’t complete a degree or certification are the most likely to regret their loans — and how they handled them — while people who attended trade and graduate schools are the least likely.
- Almost half (48%) struggle to make their monthly payments, and another 20% occasionally struggle.
- Fewer than half of respondents (42%) have researched consolidating or refinancing their student loans.
- 21% of borrowers who carry balances don’t know how to change their payment plans. That number jumps to 23% for those who struggle to make their payments, and to 30% for those who aren’t in good standing.
1 out of 3 borrowers regret taking on student loans
According to our survey, 1 out of 3 respondents with school debt said they regretted borrowing student loans to pay for college or grad school. Considering the high monthly payments that often accompany student loans, it’s not surprising that so many wish they’d borrowed less, or nothing at all.
We also found that borrowers who regret taking on student loans the most are those who never completed their degree, who don’t have their loans in good standing, or both.
Of those who didn’t attain their degree, 42.5% regret taking on debt. And of those whose loans have gone delinquent, 69.1% regret borrowing.
Student loans can be a useful tool for covering tuition, but if you borrow too much — or leave school before earning your degree — they can become a lot more burdensome than they are helpful.
Millennials and Gen Xers regret their loans the most
When we took a closer look at the responses, we found that more millennials and Gen Xers regret taking on student loans than baby boomers or Gen Z respondents — about 40% compared with approximately 25%.
Considering how the costs of college have risen over the years, millennials and Gen Xers likely had to take on more debt than boomers. Today, the average annual cost at a private college is $35,830, according to College Board. In 1989, the average annual cost was less than half that, at just $17,010.
While Gen Z students are facing some of the highest tuition costs ever, the survey results suggest that some members of this generation might be learning from their predecessors’ regrets and minimizing the amount of debt they take on to pay for a degree.
46% of millennials don’t want their kids to take out student loans
Given millions of Americans’ experience with student loans, we were curious if borrowers would let their children take on debt to attend college. According to our survey, Gen Zers are most comfortable letting their kids take out student loans, with 73.1% saying they would allow it.
That number dropped starkly among millennials, with only 54.3% saying it would be okay. Gen Xers and boomers fell somewhere in between, with 61.2% and 66.8% saying they’d let their children finance their education with student loans, respectively.
The decision to take on debt for college is a big one that shouldn’t be made lightly. While student loans might sometimes seem like the only option to pay tuition, students and their families should make sure to max out their options for free financial aid and scholarships before turning to lenders.
Nearly half of borrowers struggle to cover monthly payments
While 65.1% of respondents said their student loans were in good standing, nearly half (48.0%) said they struggle to make monthly payments. What’s more, 1 in 4 borrowers wish they’d handled their student loans differently.
The struggle to make monthly payments varies between the generations, from 59% of Gen Xers to who struggle, to 48% of millennials, to 47% of boomers, and 21% of Gen Zers. Among those who “occasionally struggle” to make payments were 35% of Gen Zers, 21% of millennials, and 14% of both Gen Xers and boomers.
Even among those whose loans are in good standing, 31.5% regret how they’ve managed their student debt. And for those whose loans have gone delinquent or fallen into default, 62.5% regret their student loan choices.
Unfortunately, our survey also uncovered that 1 out of 5 borrowers don’t know how to change their repayment plan. If this applies to you, know that with federal loans, you can easily apply to adjust your monthly payments via an income-driven repayment plan, such as Income-Based Repayment or Pay As You Earn. Other plans, such as graduated repayment or extended repayment, can also lower your bills.
If you’re struggling to pay back your student loans, find out if you can adjust monthly payments with a new repayment plan. Learning about your options could be the difference between keeping your loans current and falling into default.
58% of borrowers have never looked into refinancing their student loans
Refinancing your student loans is another way to adjust your monthly bills and change your repayment plan, as well as simplify your repayment by combining multiple loans into one. If you qualify, refinancing might also get you a lower interest rate, potentially allowing you to save hundreds or even thousands of dollars on your debt.
But among our survey respondents, more than half said they’d never explored student loan refinancing as an option.
Given the possibility that refinancing can trim your interest rate, it’s usually worth at least investigating what’s on offer. Since many refinancing providers will give you initial rate quotes based on soft credit checks that won’t affect your credit score, you can check with multiple lenders online to see what you qualify for.
But along with the benefits, keep in mind that refinancing federal loans turns them into a private loan. This means you would lose access to federal repayment plans, such as income-driven repayment, as well as forgiveness programs, such as Public Service Loan Forgiveness (PSLF). So before refinancing, make sure you’re comfortable sacrificing these federal protections.
Finding the right strategies for your student debt
Unfortunately, there’s no time machine that lets you go back to make different choices with your student loans. But if you have regrets, try to learn from past mistakes and make different choices with your loans in the future.
Here are a few strategies for managing your student debt:
- Learn about the different repayment plans. Although most federal student loans automatically go on the standard 10-year plan, you can adjust your monthly payments by applying for a different plan. And if you have private student loans, speak with your lender about the possibility of changing your plan.
- If you’ve run into serious financial hardship, consider postponing your payments through deferment or forbearance. Although interest might continue to accrue, pausing payments could help you avoid default until you get back on your feet.
- Look into student loan forgiveness programs, such as PSLF and Teacher Loan Forgiveness, which offer partial or complete discharge of your loans in exchange for qualifying service. Some states, universities and employers also offer student loan repayment assistance if you meet certain criteria.
- Learn about federal loan consolidation. A direct consolidation loan won’t lower your interest rate, but it could combine multiple loans into one, making it easier to track repayment.
- Explore options for student loan refinancing. If you have strong credit and a steady income, or can apply with a cosigner who does, refinancing your student loans could help you choose a new repayment plan and potentially save money on interest.
If you have kids heading off to college, have them learn about student loan repayment before they borrow. Our student loan calculator will help them estimate their future payments before signing on the dotted line.
Although student loans can be a useful tool for paying tuition, they can also become stressful if you borrow too much, as many borrowers have found out the hard way. But instead of dwelling on your regrets, be proactive about getting rid of your student loans as fast as you can.
Student Loan Hero commissioned Qualtrics to survey 1,038 Americans who have taken out student loans to fund their own educations. The survey was conducted online from Jan. 22-29, 2019. See the full results here.
Generations are defined as follows: Millennials were born between 1981 and 1996, Gen Xers were born between 1965 and 1980, baby boomers were born between 1946 and 1964, and members of Gen Z were born between 1997 and 2011.
Interested in refinancing student loans?Here are the top 7 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.45% APR (with Auto Pay) to 6.99% APR (with Auto Pay). Variable rate loan rates range from 1.81% APR (with Auto Pay) to 6.49% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of November 6, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 11/06/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on our student loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for SoFi.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. Mortgage lending is not offered in Puerto Rico. All loans are provided by KeyBank National Association.
ANNUAL PERCENTAGE RATE (“APR”)
There are no origination fees or prepayment penalties associated with the loan. Lender may assess a late fee if any part of a payment is not received within 15 days of the payment due date. Any late fee assessed shall not exceed 5% of the late payment or $28, whichever is less. A borrower may be charged $20 for any payment (including a check or an electronic payment) that is returned unpaid due to non-sufficient funds (NSF) or a closed account.
For bachelor’s degrees and higher, up to 100% of outstanding private and federal student loans (minimum $5,000) are eligible for refinancing. If you are refinancing greater than $300,000 in student loan debt, Lender may refinance the loans into 2 or more new loans.
ELIGIBILITY & ELIGIBLE LOANS
Borrower, and Co-signer if applicable, must be a U.S. Citizen or Permanent Resident with a valid I-551 card (which must show a minimum of 10 years between “Resident Since” date and “Card Expires” date or has no expiration date); state that they are of at least borrowing age in the state of residence at the time of application; and meet Lender underwriting criteria (including, for example, employment, debt-to-income, disposable income, and credit history requirements).
Graduates may refinance any unsubsidized or subsidized Federal or private student loan that was used exclusively for qualified higher education expenses (as defined in 26 USC Section 221) at an accredited U.S. undergraduate or graduate school. Any federal loans refinanced with Lender are private loans and do not have the same repayment options that federal loan program offers such as Income Based Repayment or Income Contingent Repayment.
All loans must be in grace or repayment status and cannot be in default. Borrower must have graduated or be enrolled in good standing in the final term preceding graduation from an accredited Title IV U.S. school and must be employed, or have an eligible offer of employment. Parents looking to refinance loans taken out on behalf of a child should refer to https://www.laurelroad.com/refinance-student-loans/refinance-parent-plus-loans/ for applicable terms and conditions.
For Associates Degrees: Only associates degrees earned in one of the following are eligible for refinancing: Cardiovascular Technologist (CVT); Dental Hygiene; Diagnostic Medical Sonography; EMT/Paramedics; Nuclear Technician; Nursing; Occupational Therapy Assistant; Pharmacy Technician; Physical Therapy Assistant; Radiation Therapy; Radiologic/MRI Technologist; Respiratory Therapy; or Surgical Technologist. To refinance an Associates degree, a borrower must also either be currently enrolled and in the final term of an associate degree program at a Title IV eligible school with an offer of employment in the same field in which they will receive an eligible associate degree OR have graduated from a school that is Title IV eligible with an eligible associate and have been employed, for a minimum of 12 months, in the same field of study of the associate degree earned.
The interest rate you are offered will depend on your credit profile, income, and total debt payments as well as your choice of fixed or variable and choice of term. For applicants who are currently medical or dental residents, your rate offer may also vary depending on whether you have secured employment for after residency.
The repayment of any refinanced student loan will commence (1) immediately after disbursement by us, or (2) after any grace or in-school deferment period, existing prior to refinancing and/or consolidation with us, has expired.
POSTPONING OR REDUCING PAYMENTS
After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship.
We may agree under certain circumstances to allow a borrower to make $100/month payments for a period of time immediately after loan disbursement if the borrower is employed full-time as an intern, resident, or similar postgraduate trainee at the time of loan disbursement. These payments may not be enough to cover all of the interest that accrues on the loan. Unpaid accrued interest will be added to your loan and monthly payments of principal and interest will begin when the post-graduate training program ends.
We may agree under certain circumstances to allow postponement (deferral) of monthly payments of principal and interest for a period of time immediately following loan disbursement (not to exceed 6 months after the borrower’s graduation with an eligible degree), if the borrower is an eligible student in the borrower’s final term at the time of loan disbursement or graduated less than 6 months before loan disbursement, and has accepted an offer of (or has already begun) full-time employment.
If Lender agrees (in its sole discretion) to postpone or reduce any monthly payment(s) for a period of time, interest on the loan will continue to accrue for each day principal is owed. Although the borrower might not be required to make payments during such a period, the borrower may continue to make payments during such a period. Making payments, or paying some of the interest, will reduce the total amount that will be required to be paid over the life of the loan. Interest not paid during any period when Lender has agreed to postpone or reduce any monthly payment will be added to the principal balance through capitalization (compounding) at the end of such a period, one month before the borrower is required to resume making regular monthly payments.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of November 8, 2019 and is subject to change.
4 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 1.9299999999999997% effective October 10, 2019.
6 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810.
As of 11/07/2019 student loan refinancing rates range from 1.90% to 8.65% Variable APR with AutoPay and 3.49% to 7.75% Fixed APR with AutoPay.
7 Important Disclosures for College Ave.
College Ave Disclosures
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
1College Ave Refi Education loans are not currently available to residents of Maine.
2All rates shown include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
3$5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees.
4This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Information advertised valid as of 09/23/2019. Variable interest rates may increase after consummation.
|1.81% – 6.49%1||Undergrad & Graduate|
|2.31% – 7.36%2||Undergrad & Graduate|
|1.99% – 6.65%3||Undergrad & Graduate|
|2.43% – 7.60%4||Undergrad & Graduate|
|2.02% – 6.30%5||Undergrad & Graduate|
|1.90% – 8.65%6||Undergrad & Graduate|
|2.74% – 6.24%7||Undergrad & Graduate|