Starting a business is always a big risk.
Things like developing a corporate culture and gaining market traction are some of the biggest barriers entrepreneurs have to break down … right?
The amount of student loan debt piling up is now such a huge impediment that many graduates are giving up on their entrepreneurial dreams altogether, The Wall Street Journal reports.
Some academic experts agree—Stanford University Law School fellow Vivek Wadhwa told the WSJ that for the students he mentors, “the single largest inhibitor to entrepreneurship is the student loans.”
With $1.2 trillion of student loan debt, it’s no surprise that many aspiring entrepreneurs must play it “safe” and instead focus on paying back their loans.
According to Edvisors.com, a website that runs college-planning and financial-aid sites, the average student accumulates nearly twice as much student loan debt as she would have a decade ago, honing in on $40,000 by the time she is ready to graduate. Some young entrepreneurs use this debt as motivation to stay on track and launch their products quickly, but others find it throws them off their preferred path.
How Can We Get Beyond Student Loans?
The hiccup business venturers are experiencing due to student loans is a big setback—according to a Kauffman-funded Census report, new businesses are responsible for about 70% of job creation. And some organizations are looking for solutions: For instance, the Rhode Island Student Loan Authority, a nonprofit organization, is researching alternative ways to reduce payments for graduates who start their own business, in an attempt to fuel the desire of discouraged entrepreneurs.
And student loans don’t just affect businesses—recent studies have shown that they delay other stepping stones in life as well, from getting married to purchasing a home.
If you’re feeling the weight of student loans, start tackling them with our checklist, I Want to Pay Off My Student Loans.