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Student Loan Debt Holding Graduates Back From Starting Businesses

Couple reviewing budget on a desk with a calculator and a laptop

Student loan debt has become almost like an illness for many in the US – and if you don’t have it, you probably know someone who has or is currently being affected by it. The burden can be so heavy for some that this may stunt what most of us consider to be the normal progression of life in getting married, buying a house, and having kids. We have touched on this topic in a previous blog concerning both the reluctance—and often inability—of graduates to take on new debt while they are strapped down with whopping monthly payments being sent to student loan servicers.

Many Graduates Are Putting Would-Be Capital Into Student Loan Debt

But what about all those freshly educated, optimistic graduates ready to go out and start their own businesses? They may be struggling under the weight of an average $351 per month payment that not only keeps them from starting a business or investing in a start-up with peers, but also leaves them feeling dejected. If you can’t muster up any capital and you can barely survive on your monthly budget, there is not going to be much energy left for that famous entrepreneurial spirit.

Starting a business requires dedication and get up and go—but it also requires cash flow. For those who are already feeling financial strain, starting a business or even just exploring the concept may be one more thing they must hold off on or perhaps even end up delaying forever, unfortunately. Student loan debt has been described as a great detriment for some millennials today, emerging with minds full of potential but bank accounts already in peril.

Reports Show the Number of Young Entrepreneurs is Declining

recent NBC News article outlined the severity of this issue. Although two thirds of millennials today may hope to open their own businesses upon getting their degrees, the number of entrepreneurs showing themselves in the workforce is declining. A report by the Federal Reserve Bank of Philadelphia, released last June, stated there is a “significant and economically meaningful negative correlation between changes in student loan debt and net business formation for … small businesses.”

“Given the importance of an entrepreneur’s personal debt capacity in financing a start-up business, personal debt that is incurred early in life and that restricts a person’s ability to take on future debt can have profound implications for the growth in small businesses,” said the report.

Restrictions on Graduates Will Continue to Grow Along with Student Loan Debt

It is obvious that the student loan debt problem is only getting worse, now topping out at $1.4 trillion, with the debt spread out among 44 million borrowers. Surely the irony is not lost that as our promising young generations seek out a good education, they are squelched on the way out with student loan debts that are sometimes impossible to pay back.

Couple reviewing budget on a desk with a calculator and a laptop

Contact Us for Help Now!

If you currently have student loan debt as well as other debt that is of concern or if your finances need an overhaul, an experienced attorney from Fitzgerald & Campbell, APLC can review your case and discuss all the available options with you. Our attorneys have decades of experience in serving clients as they navigate through challenging financial situations, to include student loan issues, debt settlement, and more. Let us review your case and discuss what would work best for you. We are here to help!

Call us today for a free consultation at (844) 431-3851, or email us at

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