Financial challenges are part of everyday life for the regular citizen in the United States. From utility bills to personal expenses, balancing the budget is normal. However, when student loan debt is thrown into the mix, things get problematic.

Most are familiar with the heavy weight of paying back tuition costs. Today, a student will graduate with an average of $28,000 in debt. Interest rates vary and there’s no guarantee the student can find a job within their preferred field, meaning the age of the debt could lengthen. All this leads to a bigger problem: negative wealth.

Negative wealth occurs when income earned does not meet or pay off total debts. Or, the total sum of debts – in this case student loans – surpasses a person’s total financial assets. Because tuition costs rise each year, this gap is widening, and more people are found to have negative wealth as a result. It’s estimated about 14 American households are impacted by negative wealth, a figure that could rise in the following years.

The contribution towards negative wealth from student loans is significant. Any household with more than $47,000 in debt types owe half of it to student loans. For households with debts between $12,500 and $46,300, about 40% of it is student loan debt.

Currently, debt is beginning to outpace repayment. Students or graduates who do not find employment that meets their financial goals make payments toward loans at a slower rate. In some cases, those with certain financial problems cannot make their payments, extending the life of the debt through interest. Even if their situation changes, they are still facing a considerable hurdle of negative wealth if they cannot make more than the minimum monthly payment.

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Demographics noted several factors for those with negative assets. It was found that a higher percentage of individuals with high debt were single mothers, minorities, and individuals from poor economic backgrounds. Additionally, because of their personal financial difficulties, they are less likely to pay off loans within a ten-year period. By extension, this exacerbates the problem of negative wealth and income disparity.

The percentage of those with negative wealth is expected to increase as the amount of student loans taken out rises, along with growing tuition rates. Some suggest this could have long term impact on a graduate’s ability to make investments for the future, such as 401K, retirement savings, mortgage loans, and other life important decisions.

Widespread negative wealth continues to demonstrate how student loan debt is impacting many across the United States. Even with flexible payment plans, a large portion of debt holders have defaulted. Roughly 35 million individuals have taken out student loans and will continue to pay them back over several decades, but without an aggressive plan to deal with high tuition costs, the US will face a growing debt crisis.