Inflation has increased anxiety among recent college graduates and most are worried about how rising costs will impact their future financial situation, according to a recent survey.
Roughly half (55%) of the students said their mental health got worse because of inflation, according to a Studocu survey. Sixty percent said they had felt worried about their financial situation often since the beginning of the school year.
Many said they fear the long-term impact of inflation: 74% thought it would be negative for their future financial situation, 71% said it would increase their student debt, and 63% worried it would affect their post-graduation job opportunities.
“It’s no secret that the world is currently going through economically challenging times,” Studocu said. “People around the globe are feeling the pinch of record-high inflation and students, who are more vulnerable to price shocks than the general population, are feeling the impact on their mental health.”
If you hold private student loans, you could consider refinancing these to a better interest rate to lower your monthly payments. You can visit Credible to compare options from different lenders and choose the one with the best rate for you.
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Inflation impacts job prospects and college students’ ability to save money
The Consumer Price Index (CPI), a measure of inflation, rose 4.9% year-over-year in April, a slowdown from the 5% increase in March, according to the Bureau of Labor Statistics (BLS). On a monthly basis, inflation rose 0.4% in April after increasing by 0.1% the month before.
April’s less-than-5% reading on the CPI shows that inflation continues to moderate. Still, the month-over-month increase could signify that the path to reaching the Federal Reserve’s 2% target will be long.
For inflation to return to 2%, it would require a more pronounced increase in unemployment, according to Jim Baird, Plante Moran Financial Advisors chief investment officer. It would also require job creation to slow considerably for some time.
Inflation is impacting not only recent graduates’ job prospects but also their ability to save, according to the Studocu survey. More than half (78%) said they had less money to spend, and 50% said they could not save at all or as much as they wanted. Moreover, 44% said they had to dip into their savings to make ends meet.
If you are interested in paying down your private student loan debt, a refinance could help you lower your interest rate and monthly payment. To see if this is the right option for you, contact Credible to speak to a student loan expert and get all of your questions answered.
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Student loan payments to begin soon
Education Secretary Miguel Cardona confirmed at a recent Senate appropriations meeting that the Education Department is getting ready to restart student loan payments.
“We’re preparing to restart repayment because the emergency period is over, and we’re preparing our borrowers to restart,” Cardona said.
Last November, the Biden Administration announced the extension of the student loan payment pause until two months after June 30, 2023, to give the Supreme Court enough time to hear arguments on whether the student loan forgiveness plan is legal. The final ruling on two lawsuits aiming to block President Joe Biden’s forgiveness plan is expected to be made public by the end of the court’s term in late June or early July.
The plan would cancel up to $10,000 in federal loans per borrower and up to $20,000 per borrower for those who used Pell Grants in college. About $441 billion in outstanding student debt could be forgiven if the plan moves forward. Biden’s student loan repayment program is also poised to substantially reduce loan payments for many Americans with federal student debt. Many Americans will resume student loan payments this Fall.
If you have private student loans and don’t qualify for federal debt relief, you could consider refinancing to lower your student loan payments. Contact Credible to speak to a student loan expert and get your questions answered.
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