Breaking Finance News

CFPB Confirms Student Loan Debt Negatively Affecting Economy

On Thursday, the Consumer Financial Protection Bureau (CFPB) confirmed what so many students already know: Student loan debt is out of control.

CFPB director Richard Cordray said, “College can open up many opportunities, and we do not want that college degree to become more of a burden than a blessing for those saddled with unmanageable debt in a tough employment market,” according to CNBC.

In a separate story, Business Insider reported that the unemployment rate among college graduates is rising faster than those without a degree.

The CFPB found that student loan debt, now averaging more than $26,000, is impacting the economy in three ways. Due to low wages and high payments, graduates can’t qualify for a loan. First time home ownership is a strong economic stimulator, according to economists.

Small business development: Starting a business requires capital. Saving enough to start a business with high student loans makes entrepreneurship difficult. Finally, retirement savings. Consumers are already not saving enough for retirement but student loan debt is making it even more difficult to save the 10 to 15 percent that personal finance experts recommend.

How to Lower Payments

If you’re having trouble keeping up with your payments, apply for the income based payment program. This program, recently enacted by the Obama Administration, looks at your income level and reduces your payment based on a predetermined formula.

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