Graduating from college with a mountain of student debt is the new normal. The average student loan borrower graduated $28,650 in debt in 2017, according to the nonprofit the Institute for College Access and Success. But nearly 400 young men had that huge weight lifted off their shoulders on Sunday when billionaire investor Robert F. Smith revealed that he would pay off every 2019 Morehouse College graduate’s outstanding student debt.
A new survey of four-year college students found that the majority of undergraduates would spend the money that would have gone toward student loan payments on rent and living expenses (45%) or put it toward their savings (34%). Just 8% would spend it on travel, 5% would spend it on going out and other entertainment, and 4% would spend it on wellness expenses such as a gym membership or therapy.
There are notable differences in what male and female college students would do with the savings. More women (50%) would spend the money on rent and living expenses than men (37%), while men (39%) are more likely to say they would put it in savings than women (30%).
Female College Students are More Likely than Men to Use Savings for Rent and Living Expenses
If all your student loans were paid off at graduation, how would you spend the money that would have gone toward loan payments every month?
Our survey found that the reality of paying off that debt plays a major role in what grads choose to do after college. Half of college students with loans (48%) say the cost of their education is a major factor in deciding what type of job to take after graduation. Black students (61%) are more likely to say the cost of their college degree will be a major factor in the type of job they will seek after graduation than Hispanic students (53%), Asian students (48%), and white students (43%).
Black Students are More Likely to Say the Cost of College Will be a Factor in What Job They Get
How much of a factor, if any, will the amount you owe for your student loans be in what type of job to get after graduation?
Almost half (45%) of all student borrowers say their loans will be a major factor in deciding when to buy a house, while a similar number (44%) say it will be a major factor in choosing where to live, 38% say it will be a major factor in deciding whether to buy a car, and 21% say it was a major factor in deciding their major.
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Methodology: This survey was designed and conducted by College Pulse. Interviews were conducted May 20 among a sample of 3,400 full-time and part-time students attending four-year colleges or universities in the U.S. who are part of College Pulse’s American College Student Panel.
