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Student Loan Borrowers Refuse to Pay Back Loans: ‘Live the Life You Want’

Student loan borrowers are making a controversial decision that counters all conventional financial wisdom.
Americans hold $1.77 trillion nationwide in student debt, but some 20- and 30-year-olds are foregoing the expectation to repay those loans.
The new shift in attitude comes as some Americans believe homeownership will be out of reach for their entire lives, so instead of worrying about their credit scores, they’re deciding to focus on what makes them happy in the meantime.
“This is what they call ‘doom debt’,” X user @WallStreetSilv wrote on the social media platform. “This is a common discussion among people in their 20s and 30s these days.
U.S. President Joe Biden delivers remarks on new Administration efforts to cancel student debt and support borrowers at the White House on October 04, 2023 in Washington, DC. In addition to announcing a plan for an to give $9 billion in student debt relief Biden urged the House to quickly elect a new Speaker after McCarthy was removed from his position. Kevin Dietsch/Getty Images
They simply aren’t planning to pay their student loan debt. They don’t care if their credit is ruined, because they are never going to be able to afford a home anyways. So, the attitude now is, just ignore it and live for today. From their perspective, it sort of makes sense and I don’t blame them.”
Today, the median home price in the United States is $431,000, and American’s tens if not hundreds of thousands in student debt is quickly making this dream out of reach.
‘What If I Don’t Pay My Student Loans?’
These conversations are taking place after a video in which a TikTok user named Sarah Rebecca Cook shared she’s not ever planning on paying back her loans.
“People are like, so what if I don’t pay my student loans? What are you going to do? Ruin my credit so I can’t buy the house that I wasn’t even going to be able to buy ever in my lifetime anyways?” Cook said in her video.
The video creator went on to say that all the fear factors that were once used against loan holders are simply not working anymore because the system is broken.
“People just don’t care anymore when there’s no way to win and the cards just keep getting stacked against you,” Cook said. “At what point do you just say … it and just start living the way that you want to?”
The situation as it stands is leaving many Americans to accept that they may very likely die with the student debt still attached to their name, said Lindsay Clark, the director of external affairs at student loan forgiveness platform Savi.
“This is one of the most common questions we get at Savi: what happens when I die with my student loans?” Clark told Newsweek. “That’s a reality for them based on their age, where they are in life, and how much debt they have.”
The ‘Grim Reality’ of Student Loan Debt
Student loan borrowers over 50 are among the fastest-growing demographic of borrowers, with high interest rates upping their debt each month.
“So many borrowers have been making payments for years, or decades, if not more, and their student loan balance has not decreased, it’s increased,” Clark said. “And the reason for that is because of capitalized interest.”
Historically, Americans have raced to pay off their student debt due to concerns over how it could affect their ability to buy a home or save for retirement. But as people become more cynical about the housing market, many are deciding to ditch the dream of a debt-free existence entirely.
“It’s a grim reality, but increasingly common, for individuals to carry student debt into their later years,” Dennis Shirshikov, a finance and debt management expert and professor at the City University of New York, told Newsweek.
College tuition costs have surged by at least 20 percent over the past decade, with universities consistently upping their tuition to keep up with inflation each year.
“The long-term impact is profound, affecting individuals’ ability to save for retirement, invest in assets like real estate, or even make every day financial decisions without the overhang of debt. This scenario is increasingly becoming the norm rather than the exception.”
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