Student loan debt nationally is a staggering $1.3 trillion dollars, or about 10 percent of all outstanding debt.
For seven out of 10 students, repaying student loans can be a nearly insurmountable obstacle that is altering career decisions and delaying the milestone of buying a home.
Nationally, the average student loan debt is about $30,000.
Across Florida, the average is about $25,000.
At the University of South Florida, about 60 percent of students have an average loan debt of $22,600. At the University of Tampa, about 60 percent of students owe about $34,000.
Unlike most debt, however, students by law are prevented from refinancing those loans.
It is a dilemma that is highlighted in a survey released by the National Association of REALTORS Research Department and American Student Assistance, also known as Salt.
The home ownership rate is falling, and younger generations saddled with student debt are part of the reason, the survey found.
“That (student) debt is thrown into the mix with any other debt they have,” said Jack Rodriguez, a Tampa real estate broker. “It affects the amount of loan they could get. With the ability to refinance into a lower interest rate…they would bring down their payment which would allow them to purchase more house.”
U.S. Rep. Kathy Castor, Rodriguez and other real estate agents held a press conference on Aug. 22 at the Greater Tampa Association of REALTORS to highlight the problem, and show support for a bill on refinancing student loans. They were joined by student leaders from USF, UT and Hillsborough Community College.
“If we really want to make a change, and want to protect our nation’s youth and generations to come, we need to focus on our assets, college affordability and how we’re going to fix this,” said James Scudero, student body president at UT.
Student loan debt is crippling, said Chris Griffin, peer advisor leader for USF New Student Connections.
Food banks can now be found on student campuses, and student homelessness is happening, Griffin said.
“The scary thing is the food banks are used,” said Alec Waid, student body vice president at USF.
The pending bill, known as the Bank on Student Emergency Loan Refinancing Act – has about 170 sponsors. But, efforts to pass the bill have stalled for at least two years.
“It’s something of a partisan issue. It shouldn’t be,” said Castor.
If approved, student graduates could refinance private school loans issued before July 1, 2015.
“A citizen can refinance their car loan, boat loan and their credit card debt,” Castor said. “But, students are not allowed to refinance their student loans. This would be a very good time to do this, because interest rates are very low.”
According to the survey, at least a quarter of all students have a typical loan debt of about $25,000. And, 71 percent of non-homebuyers say student loan debt is delaying the decision to buy a home. In some cases, the delay is about five years.
About 42 percent of students with loan debt delayed moving out of the family home. Millennials born between 1990 and 1998, and who made less than $25,000 in 2015, were most likely to stay at home longer.
But, younger generations aren’t alone in struggling with student debt.
Tampa real estate broker Alma Alexander said her daughter earned a degree in graphic arts in the 1990s and left school owing nearly $35,000. The debt wasn’t paid off until two years ago.
“She worked at paying it when she could,” Alexander said.
Published August 31, 2016