Student loan debt can have significant long-term effects on personal finances. One of the key impacts is the burden of monthly loan payments, which can limit an individual's ability to save for retirement, purchase a home, or invest in other assets. This can lead to delayed financial milestones and reduced overall wealth accumulation.

Additionally, high levels of student loan debt can affect an individual's credit score and ability to qualify for other forms of credit, such as car loans or mortgages. This can result in higher interest rates and less favorable terms, further exacerbating the financial strain.

Furthermore, the psychological stress of carrying significant student loan debt can impact mental health and overall well-being, potentially leading to decreased productivity and job satisfaction.

For example, a recent study by the Federal Reserve Bank of New York found that individuals with higher levels of student loan debt were less likely to own a home by age 30 compared to those with lower levels of debt.

Addressing the long-term effects of student loan debt on personal finances requires a multifaceted approach, including policy changes, financial education, and support for borrowers facing financial hardship.