Student loan payments are back. For many, that means the golden era of splashy vacations and nonstop travel is over.
26.11.2023 - 13:51
/ insider.com
/ Katy Nastro
For people with a travel bug, the months between spring 2021 and October 2023 posed an unprecedented opportunity.
It was a perfect storm: Student loan payments were on hold, frozen without interest, thanks to the Covid-19 outbreak the year prior. Many shifted to a hybrid schedule or could work entirely remotely. Pandemic restrictions were loosening up nationwide, and countries like France and England officially reopened their borders to tourists.
Many borrowers had more freedom than ever — and hundreds of extra dollars burning a hole in their pockets — so some funneled their newfound independence and extra cash into travel.
But with the resumption of student loan payments in October, travelers' budgets are tightening — and the pandemic-era dream of freewheeling revenge travel is crashing back down to earth.
A recent survey by travel company Going, shared with Business Insider, found that 21% of respondents said they had student loans. Of those, about two-thirds — 63% — said monthly payments would affect how they travel.
According to the personal finance website Bankrate, 28% of Gen Zers have student loan debt, compared with 43% of millennials. Twenty-one percent of Gen X has student loans, per the site. The average student loan debt is about $29,000 — and the American population owes $1.75 trillion in student debt, according to Forbes.
Katy Nastro, one of Going's travel experts, said that while many travelers enjoyed high-budget international trips between 2021 and the start of 2023, many will begin to rethink what travel looks like for them in the coming months.
"Moving forward into next year, a good portion of people who might've looked to take the same amount of trips that they did this year are now going to say, 'Well, maybe it's not really in the budget anymore,'" Nastro said. "They're probably going to look at what type of travel they want to do this year and then have to make some adjustments."
Of the student loan borrowers surveyed by Going, 38% said they'd have to be more budget-conscious during any upcoming trips, and 17% said they'd have to take fewer trips than they used to.
Throughout the pandemic, 25-year-old Katie Simony flew between her home in Colorado and her boyfriend's home in Minnesota at least once a month, if not every two weeks.
Beyond commuting between states, Simony told BI she and her boyfriend would regularly take weekend trips, and she even swung a trip to France in 2022. By June last year, she said she had already used most of her PTO days.
However, that travel heyday is essentially over for Simony, who attended Grand Canyon University in Phoenix for two years starting in 2016. Now, she pays about $350 monthly in loans.
Simony said she didn't graduate from the university,