Why Some Graduates Can’t Pay Off their Student Loans


In contrast to its thrills and adventures, college also entails one of the horrors that majority of students encounter. A student loan is a liability that most college students have to endure even after graduating from college. According to a report by the Institute for Fiscal Studies (IFS), 70% of college graduates are never expected to fully repay their college debts. And a fraction of those who can pay is anticipated to be still paying in their 50s.

This means a large number of loans will likely be left unpaid forever and be shouldered by the taxpayers. Despite the risk being known public, there is still a constant growth in student loans every year. But why? These are some of the explanations.

Reason #1: Unemployment and declining wages

Despite the gradual decrease in unemployment rate, some graduates stay unemployed for a significant period of time for several reasons. Meanwhile, others who were able to enter the workforce have to face lowering wages. Many graduates face the burden of taking on an entry level job due to a career change or difficulty in finding a job related to their major. This causes the imbalance in income and expenses for an individual’s financial statement.

Reason #2: Sudden turn of events

Not all students experience the typical college experience. Some students face a change in majors or college or some drop or fail their classes. Other graduates lose their interest in the major they took up and opted for a career change. These events can usually lead to taking up more debts and more time to pay the debts.

Reason #3: Increasing fees

With time passing by, the cost of living and education has drastically increased. Along with this increase is a stagnant or decreasing income from the workforce. Meanwhile, others failed to acquire a financial aid or grants that could have alleviated the financial burden.

Reason #4: Poor financial management skill

With the required expenses, college students usually fail to grasp the importance of a small amount of money. Meeting the minimum monthly payment for the student loan can steadily decrease the debt and interest being accumulated over time. In addition to that, falling into the trap of long repayment plans is a considerable factor when dealing with debts. Just like making an investment, debts are directly proportional to time. However, the major difference is that an investment is an asset while debts are a liability.

Reason #5: Failure to set up a safety net

Surprisingly, paying off student debts immediately can have repercussions. This can result in improper allocation of budget, thus not having money to spend during emergencies. As a result, one will possibly acquire more debts for unexpected events like medical bills or car maintenance.


Finishing college has been a constant struggle for many students, not only personally but also financially. With the beneficial impact in society and economy, college should be accessible to anyone, especially those deemed worthy of it. But with the current progress in the economy and the market, alleviating college’s financial burden can be a bit far from possibility.

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