Many millennials know what it’s like to hear their parents boast about the assets they acquired in their 20’s. Maybe a job right out of college that allowed them to live comfortably while buying houses and cars, sometimes without ever earning a degree at all. Do you know how many of the students are unable to pay student loans without the help of their parents?
Maybe their parents had a comfortable savings account that allowed them to invest and create wealth. Instead, millennials found themselves looking at the generations before them with discouragement and cynicism. They weren’t working less or trying less—they were simply earning less.
How Much Of Students Are Unable To Pay Student Loans?
It’s a phenomenon that’s been frustrating millennials dating back to the Great Recession between 2007 and 2009, where fewer jobs were available, savings decreased, and coupled with that was a generational reluctance to purchase homes and build equity.
Tangibly, the recession and the years following created financial challenges for those born in the ’80s and early ’90s, but it also created a pessimistic attitude shift of how this generation and the ones to come after viewing the future and unable to pay student loans.
Millennials are not like their parents, despite working hard to create upward mobility for themselves. And they know it.
Check out our guide on solving debt problems by simple hacks.
According To The Census Data Reports, How Much Of Them Are Unable To pay?
In fact, the 2019 Census data found that approximately 24% of young adults are considered financially independent by 22. And according to a new survey from Surety First, over half of the adults aged 25-31 say they’re economically dependent on another party.
With slower economic growth, lower earnings, and more restricted financial milestones than any generation prior, many adults are still struggling to become autonomous over their finances.
According to the Surety First survey, 34% of respondents said financial independence isn’t achievable before 30 years old, and 20% admitted they’re earning less than needed to cover their expenses.
It’s not all that surprising that people are earning less than needed to pay their bills, even with a decent job or a college education, and unable to pay student loans. Today’s average wage (after accounting for inflation) has about the same purchasing power it did 40 years ago, according to Pew Research Center. And what little wage gains there have been mainly having; flowed to the highest-paid tier of workers, too.
And this financial struggle is even more evident when you look at millennial college graduates, many of whom graduated in the years following 2008. Of those who took out college loans, 32% said they are unable to pay their student loans without parental aid, according to Surety First’s survey.
Financial Struggles Of The Students?
Millennials, now ages 25 to 41, are the largest population of current home buyers, Yet, astronomical student debt has crippled this generation from saving enough for down payments and home loans.
But who’s fault is this? Some blame millennials for taking out so many college loans that they couldn’t afford and being unable to pay student loans, not assessing risk, or not entering high-paying fields. Yet, when we look closer, the blame often falls on inflated tuition prices, not the borrower and inability to pay student loans.
In fact, recent data shows that the cost to attend college is rising 800% faster than average wages—Those stagnant wages, that is. And for most, college isn’t even an option. It’s a necessity.
Conclusion:
Perhaps the most sobering survey statistics paint a complicated picture of millennials, an absence of wealth, and ongoing reliance on their parents. Almost 40% of adults aged 25-31 said they had asked their parents to help with rent, and 31% admitted they couldn’t buy a house due to their financial dependence on family, friends, or a partner. These are the most common reasons, and as a result, they are unable to pay student loans.
The cynicism may just have to continue.
Don’t miss out on our bonus guide on saving money around the house. Because financial planning is always started getting harnessed by managing own residence first:)
Read Also:
