It is no secret that student loans burden the lives of workers following their graduation to employment.   While the student loan debt toll climbs reaching over $1.3 trillion, the new generation of employees are seeking engagement into the workplace.  For many, this is not an easy task given the financial mountain blocking their way to satisfaction.  To put this in perspective, a 2014 Gallup and Purdue study revealed that less than 5% of workers who had between 20k and 40k in loans felt engaged in the workplace.  These types of challenges translate to the small business market which is reportedly stymied due to hampering debt.

The effect of outstanding debt on small business startups is not hard to imagine.  Small businesses require a considerable investment to get up and running.  Student loans often put a new graduate borrower thousands of dollars in debt; in fact, the average is right around $30,000 across the nation.

In an effort to confirm these ideas, the Federal Reserve Bank of Philadelphia launched a questionnaire that was targeted at small business owners and other larger firms.  According to this survey, many of the small business  owners (25% to be exact) experienced difficulties or delays in starting up their company.  Additionally, these problems continue after company formation.  When compared to larger businesses, smaller companies are much more discouraged to take on extra debt, and about 60% of these small companies do not meet their financial threshold for maintaining the company.

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There have been many new trends that have been linked to student loans.  Parents who have become too involved in their children’s student loans often have smaller retirement funds by age 40-50.  Graduates who have accumulated debt throughout college generally delay home ownership considerably compared to those without the same financial burdens.

Now a similar trend is observable for founders of kickstart businesses which is another effect of the current student loan situation.  It shows that these loans stymie economic growth overall as millennials find themselves making more conservative decisions compared to previous generations.  The impact of the debt on the future workforce is something to consider with apprehension.