With college graduations quickly approaching, there will be a new wave of young adults looking for jobs. Graduation also means that these same adults will have to start making payments on their student loans. But because the job market makes it difficult to find jobs, it is also means it’s difficult for these recent grads to make these often hefty payments. Which begs the question: If they’re having trouble paying their loans how could they possibly afford expensive premiums?
A recent study by the Institute of Higher Education Policy found that of all students borrowing money for their education, 1 in 4 has trouble making their full monthly payments. This is really dangerous for recent graduates. When a borrower is delinquent on payments, it can affect their ability to get a good rate on future loans, including auto loans and mortgages. It also adversely affects their credit report.
The number of students who incur debt in college has increased over the last 15 years. In 1993, less than half of students graduated with debt. In 2008, two-thirds of students graduated with debt. The amount of average debt has also increased drastically, from $18,650 in 2004 to $23,200 in 2008. This is a burden for many graduates. Tasha Younger, a former nursing student, was unable to find a job that paid enough to cover basic expenses plus the loan payments. She found herself having to choose between paying her electric bill and making loan payments.
Having to juggle basic living expenses and student loans is very difficult, especially for many recent graduates who aren’t used to budgeting their money. Up until recently, health insurance was yet another payment that young adults had to worry about every month. Because of this, many recent graduates chose to forgo health insurance, since it was another added expense.
But thanks to the Affordable Care Act, health insurance doesn’t have to be something they have to give up because they can’t afford it. The new health law allows young adults to stay on their parents’ health plans until age 26—meaning if they can’t find a job after they graduate or their employer doesn’t offer them benefits, they’ll still be covered.
With so many other things to worry about, it is a relief that young adults now do not have to worry about health coverage as well. This is just another reason we must fight to protect the Affordable Care Act.