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Millennials Student Loan Debt Is Massive: What’s Ahead?

millennials student loan debt

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If you’ve attended college or graduate school in the last decade, have a child who is preparing to attend school, or even just read a newspaper then it’s no secret that student loan debt is a serious problem.

For many millennials, the problem of student loan debt threatens everything from finding a permanent residence to staying in a job. In fact, according to Young Invincibles, a millennial advocacy group, the average net worth for adults ages 25-34 holding student loan debt is -$1,900. Compare that to 1989, when the same age and debt cohort had an average net worth of $89,143.

And now, the ripple effects of this type of burdensome debt at a young age are starting to be felt. Millennials aren’t able to buy houses, and for the first time, the U.S. birth rate is at an all-time low as many are concerned about financial stability and the cost of having children.

Many other effects are being seen in education and other sectors because of millennials’ student loan debt. And with 58% of college graduates holding student loans, there are plenty more that might be felt when it comes to millennials and student debt.

Fewer People Going To College

As the education system stands now, the annual costs of different types of college are, on average:

  • 4 Year Private: $34,699
  • 4 Year In-State: $9,528
  • 4 Year Out-of-State: $21,632
  • 2 Year Public In-State: $3,570

Including other costs and fees, these amounts can be prohibitive to pay out-of-pocket, and rather than take on student loans, expect people to start skipping traditional college at the age of 18. Instead, it’s likely young adults will start looking for alternatives for experience and knowledge that won’t put them in the same situation as current millennials debt.

Woman leaning on a table with a stack of books.
Millennials student loan debt is causing people to rethink the cost and value of higher education.

Statistically, many millennials who do choose to have children are also still holding their own student debt. While it would be nice to start saving for a child’s education at birth, it’s next to impossible if you’re still trying to get rid of your own education debt.

Because of this, it’s likely that we’ll see changes to the whole idea of higher education when the children of millennials reach college age. Instead of aiming for top schools – with rising costs – look for parents to avoid student loans altogether, opting for alternatives like community college and scholarships.

Changes To Funding Higher Education

Millennials’ student loan debt is of growing concern to other generations as well, and there are efforts being made to prevent this type of problem from occurring again in the future.

Several states have already started changing how students are charged for school, including New York, where families making under $125,000 a year now get free tuition from institutions within the state school system. Even individual schools are rethinking how their costs affect graduates; at the University of Michigan, students from families earning under $65,000 a year get free tuition. Other schools, like Rhode Island’s Brown University, are restructuring financial aid packages to offer grants instead of loans.

Expect prospective students to look towards grants and scholarships to help afford college, skipping the high cost of student loans.

Person filling out a student loan application.
States and schools are starting to get rid of traditional student loans in favor of different alternatives.

Millennials Debt And Student Loan Forgiveness

In 2018, there have been a number of proposals floated by the government regarding student loan debt forgiveness.

Of primary concern are called to end the Public Service Loan Forgiveness programs that are the major method of reducing student loan debt for many graduates. After a set number of years working at a qualifying place of employment in a qualifying position, borrowers can have the remainder of their debt forgiven. This benefit is afforded primarily to teachers, doctors, social workers, law enforcement, and others who work for the benefit of the public. These programs are often essential for employees who typically earn less than they would in the private sector.

Woman outside of a brick building with papers flying down around her.
Take advantage of student debt forgiveness options while you still can.

Another concern is the call to end subsidized student loans. These loans are structured so that the government pays for any accrued interest while you’re in school, and while they used to be offered on the graduate level, even undergraduate borrowers could be at risk of losing this assistance.

You can technically discharge your student loan in bankruptcy so long as you can show that there is “undue hardship.” Unfortunately, this term has never been clarified, so in most cases, student loans will stick with you even after bankruptcy. Now, however, there are calls to explain what that term means legally, which would make it easier for some borrowers to have their loans discharged by the courts. However, a concern is that if loans are now dischargeable, lenders will start raising rates and make it harder for more students to get a loan.

Changes In Areas Of Study

The way things currently stand, millennials with a college degree can hope for an average starting salary of $50,390. The problem is, for many student loan borrowers, the amount of debt they graduate with is often close to, or more than, that amount. Unfortunately, that means that graduates are faced with handing over large portions of their paychecks to lenders, allowing them to save less for the future.

Young male in a library with a stack of books in his arm.
With millennials debt on the rise, it’s likely more students will rethink their majors for higher-earning ones.

Because of this, it’s likely that many millennials and younger generations will focus on college majors and industries that earn them higher and more stable salaries, helping to ease the burden of student loan debt. In fact, these changes have started happening in the last decade.

Most Popular Majors 2005-2015


1. Business

2. Education

3. Health professions and related

4. Psychology

5. Art and performance

6. Communications and journalism


1. Business

2. Health professions and related

3. Education

4. Psychology

5. Art and performance

6. Communication and journalism


1. Business

2. Health professions and related

3. Social sciences/history

4. Psychology

5. Biological/biomedical science

6. Engineering

There has been a noticeable move towards majors that have greater job prospects and higher salaries, likely as an attempt to make the cost of college – both during and after – worth it.

Broader Fallout Of Millennials’ Student Loan Debt

The issue of millennials and student debt will have far-reaching effects on the world of higher education. But there are other sectors, such as housing, that are also seeing repercussions from the fact that many millennials are burdened with overwhelming debt. As millennials are forced to hand over more of their money to debt repayment and accumulated interest, there are discernible shifts in whether people can afford to buy a home, the timing in which millennials are choosing to have kids, and a complete change in the idea of higher education for those who are still carrying debt burdens.

Group of workers in front of desktop computers.
There will be changes to the idea of industries and business because of shifts related to millennials student loan debt.

If you’re still holding student loans, it’s a good time to check out repayment and forgiveness options that are available through the government; these programs may not be available for much longer. It’s also worth it to look at your options for consolidating student loans, which can help to relieve your burden now.


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