College students are regretting taking out student loans before they even leave school, a new report from WalletHub revealed on Tuesday.
Roughly 61 percent of college students said they regretted how much they borrowed with student loans, according to the report.
Since typically student loan regret doesn't settle in until after one has completed their education, the high rate of regret could speak to the current economic conditions and inflation that Americans still face, Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek.
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"Students may be going into debt to simply get by while in college and realize that beyond that, there will be additional bills coming due for the classes they're currently taking," he said. "Increased costs across the board are leading to more self-awareness, and it will be interesting to see if it will cause some students to reconsider or even drop out of their current college path."
Nationwide, federal student loan debt has reached at least $1.6 trillion, and college students are already feeling overwhelmed by their financial responsibilities.
Seven in 10 college students said they were financially overwhelmed in WalletHub's survey, with 20 percent saying they didn't have a plan for paying off their student loan debt after college.
WalletHub editor John Kiernan said many of the college students in question are being set up for failure.
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"No one expects students to have everything figured out by the time they graduate college, but we do expect them to hit the ground running pretty quickly once they reach the 'real world,' and we're currently setting them up for failure," he said in a statement. "It seems like students just aren't getting the kind of practical instruction they need to manage money responsibly, and we can't simply attribute this to a lack of interest from students."
The lack of planning around their financial futures is not just the college students' problems, as Kiernan said the study found 85 percent of students would take a personal finance course if it were available and they could get credit for their degree.
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College Enrollment Crisis?
If students start to feel that their college educations aren't worth the return on investment, universities could begin to see their enrollments dwindle.
The trend is already happening at a national level. Since 2010, U.S. undergraduate enrollment has dropped by 8.5 percent, according to the National Center for Education Statistics.
"The decline in state funding, which has led to increased tuition cost and college students having to take out ever higher loans to attend college," Kevin Thompson, a finance expert and the founder and CEO of 9i Capital Group, told Newsweek. "This statistic admits a drastic albeit glaring truth. Kids are now rethinking higher education."
If the enrollment decline continues, Thompson said there are two potential outcomes. Either colleges will become only for a single subset of society, or colleges will be forced to adjust the cost of higher education.
Students are already seeing what their futures might look like when they look at Generation X and millennials, who range in age from 28 to 59. These generations have often struggled to achieve the "American dream" as it once was promised.
"Some borrowers have paid consistently for a decade, only to see their loan balances grow," Thompson said. "These mounting debts have long-term effects, such as delaying starting families or purchasing homes. Additionally, many feel pressured to accept jobs they don't want just to begin repaying their loans."
While President Joe Biden has approved several rounds of student loan forgiveness for public service workers and victims of fraud, he also offered a new kind of income-adjusted repayment plans, which lowered many Americans' monthly payments to zero.
However, these changes haven't quite convinced today's college students that their loans will be worth it in the near future.
"The simple answer is that college is too expensive," attorney Michael Lux, who is also the founder of the Student Loan Sherpa, told Newsweek. "Since it has never been harder to pay for a college degree, students often feel like they have to choose between crippling amounts of debt or failure."
Mathematically, the debt often just "doesn't add up," Michael Ryan, another finance expert and founder of michaelryanmoney.com, told Newsweek.
The regret goes beyond money too. Many Americans have had to postpone marriages, delay having kids and stick with jobs they hate as their student debt hangs over them, he said.
"Students are borrowing based on dreams, not realities," Ryan said. "They're told a degree is a ticket to success, but they're not shown the fine print on that ticket's cost."
