How Graduating with Less Debt Impacts Your Future - Scholarships South Carolina, Meeting Street Scholarship Fund (2024)

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How Graduating with Less Debt Impacts Your Future - Scholarships South Carolina, Meeting Street Scholarship Fund? ›

The Meeting Street Scholarship Fund was founded with the mission of making college accessible for hardworking, qualified students who want to attend one of South Carolina's best colleges. Graduating with less debt helps pave the way for a more financially prosperous life for students and future generations.

The Benefits of Graduating Debt-Free

It can also reduce stress and give you a financial head start in your career. Moreover, graduating debt-free can also improve your credit score and increase your chances of getting approved for loans or credit cards in the future.

Key Takeaways. Carrying student debt can affect your ability to buy a home if your debt-to-income ratio is too high. If you have too much student loan debt, you won't be able to save as much for retirement. Student loan debt can lower your credit score, especially if you fail to make on-time payments.

Earning a debt-free bachelor's degree can give you much more freedom and flexibility in your personal and professional life after graduation.

Explanation: Applying to as many scholarships as possible can significantly reduce your student debt by providing funds to cover the cost of your education. Scholarships are types of financial aid that do not need to be repaid, unlike student loans.

Impacts of student loan debt

They find that debt increases the likelihood graduates choose high salary jobs and decreases the likelihood they choose low-paid “public interest” jobs.

Impact on Academic Performance

Research has shown for nearly two decades that higher levels of student loan debt are associated with lower academic achievement among students, as well as reduced course loads and even lower graduation rates.

May rush into a job to meet repayment requirements

According to a study published by the American Student Association, nearly 50% of graduates agree that their debts hampered their ability to further their careers. Someone without student debt could be more choosy and take the time to find a job they truly enjoy.

Subsequently, 90 percent of Black and 72 percent of Latino students take out student loans, compared to 66 percent of white borrowers. That means they borrow more and once they graduate; they are faced with an inequitable job market where they earn less than their white counterparts.

When they leave college with debt, many without a degree, people start from behind—enjoying less financial stability and experiencing more stress than prior generations. This, in turn, makes them question the value of education, both for themselves and for others.

How does debt affect happiness? ›

There's a strong link between debt and poor mental health. People with debt are more likely to face common mental health issues, such as prolonged stress, depression, and anxiety. Debt can affect your physical well-being, too. This is especially true if the stigma of debt is keeping you from asking for help.

More than four in ten students at public four-year universities complete their degree with zero debt. Nearly eight in ten students graduate with less than $30,000 in debt. Among those who do borrow, the average debt at graduation is $27,400 — or $6,850 for each year of a four-year degree at a public university.

When debt burdens are lifted, student borrowers can start new businesses and in turn, create job opportunities for others. They can buy homes for the first time in their lives, pay down other debts such as their credit card bills, and have less reliance on social safety net programs.

Scholarships Can Affect Financial Aid

For example, your need-based aid includes $10,000 in grants and $5,000 in student loans. If you win a $3,000 scholarship, your college may subtract an equal amount from your loan, so you would need to borrow $2,000 instead of $5,000.

Colleges want wealthier students

“Better prepared students, higher graduation rates and a better chance of attracting students who will later give back to the college — that's the reward system that's in place,” says Van Der Werf, adding that there's no similar reward system for helping low-income students.

Student debt will not be worth it in every situation. Borrowing a large sum and entering a low-paying career will either not pay off financially or take a painfully long time to do so.

You can focus on building your career without worrying about repayment requirements. Students who graduate with too much student loan debt are more likely to take a job that pays better, as opposed to a job that matches their major and career goals.

When debt burdens are lifted, student borrowers can start new businesses and in turn, create job opportunities for others. They can buy homes for the first time in their lives, pay down other debts such as their credit card bills, and have less reliance on social safety net programs.

"Poor financial practices, such as late payments and charged-off debts, will lower your credit score," said Ms. O'Neill. A low credit score can affect things like your future employment, ability to buy a home or rent an apartment and even your car insurance premiums.