2 Major Reasons Why Student Debt Is Crippling Millennials

Going to college opens up a world of possibilities and provides graduates with opportunities for higher income. However, attending school in the U.S. isn't cheap, and many students must recur to hefty loans in order to cover their tuition. In fact, student loan debt already surpasses the $1 trillion mark, with the average debt per person almost hitting $29,000, and 69 percent on college graduates owing money.

Much like having a mortgage, having a student loan can be problematic when trying to undertake new projects like setting up a business or buying a house.

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According to a study conducted by the Federal Reserve Bank of Philadelphia in 2015 – based on a Gallup and Purdue University survey from 2014 - about 25 percent of the people polled who had a student loan debt of more than $25,001 declared being unable to start new businesses due to this liability.

Another study, from the National Association of Realtors and consumer literacy program SALT, revealed 71 percent of non-homeowners with debts from student loans attributed their inability to buy a home to their student debt. Even worse, more than half of the people surveyed said they expected this situation to linger for at least five more years.

The most affected non-homeowners were those aged between 26 and 35, and those with very large debts of $70,000 to $100,000.

"A majority of non-homeowners in the survey earning over $50,000 a year — which is above the median U.S. qualifying income needed to buy a single-family home — reported that student debt is hurting their ability to save for a down payment," Lawrence Yun, the Realtors' Association chief economist explained.