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Survey finds that student debt holders spend 20% of their take-home pay on loans

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In 2018, college graduates earned weekly wages that were 80% higher than those of high school graduates.

But for the millions of Americans with student debt, a significant portion of those wages go straight back into paying off loans. In the second quarter of 2019, the amount of student debt held by Americans surpassed $1.6 trillion for the first time. This massive total is having an impact on how borrowers live their lives.

A study released today by TD Bank of more than 1,000 Americans between the ages of 18 and 39 who paid off or are currently repaying student loan debt found that on average, borrowers are spending 20% of their take-home pay each month on student debt.

The results of the Student Debt Impact Survey highlight the ways in which student debt is holding borrowers — and the economy — back. But the survey also indicates the ways in which borrowers may be becoming more responsible.

Today 45 million borrowers owe student debt in the U.S. Among respondents to the survey, the average student debt total was $26,495. The average debt payment was $579 a month and the average monthly take-home pay was $2,689. This means that these borrowers are allocating more than 20% of their take-home pay to repaying student debt.

Just over 60% of respondents said they expect to repay their student loans in four or more years and 24% said they expect to repay their loans after 10 or more years. Sixty-one percent of respondents said they save 10% or less of their income each month and 20% say they are not saving anything each month.

As a result, these borrowers are forced to delay long-term savings. Over 40% of respondents said they do not contribute to a 401(k) plan because of student debt and 43% say they do not contribute to a rainy day fund.

"Any slight bump in the road for some of these folks, even well into their 30s, is going to be troublesome for them and that's a major, major concern," Mike Kinane, head of U.S. Bankcard at TD Bank, tells CNBC Make It.

TD Bank's survey also echoes previous reporting that student debt is forcing borrowers to delay traditional markers of adulthood. Respondents say that because of student loans they have delayed buying a home (36%), getting married (21%) and having kids (26%).

Delaying these milestones also impacts the wider economy, says Kinane. "If you're not buying a home, you're also not buying all of the things that come with a home, so economic impact is a fairly large."

While the inability of these borrowers to save is troubling, Kinane also points out that millennials with student debt may be more responsible in their spending than previous generations — even if they are still spending money on lattes. He notes that about a fifth of respondents said they were trying not to spend on coffee, but 62% said they were putting off vacations.

"They're shopping less, they're going on vacations less, they're splurging on gifts less, they're dining out a lot less," says Kinane. "There's this perception about millennials but we're finding they may be a little bit smarter than people think — especially folks that have this kind of debt. They are college educated and they appear to be more careful about how they're spending their money and they're careful about what they think they can do and more importantly, what they can't do."

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