Student Loan Debt a Curse on Millennial Generation

It’s not easy being a Millennial. They get ridiculed more than Donald Trump, though at least Johnny Depp hasn’t threatened to assassinate any of them.

Older generations see them as a bunch of self-absorbed frappuccino sippers living in their parents’ basement, watching Netflix and playing video games ‘til all hours of the morning, which is not a bad life, as long as the pizza delivery guy knows to knock on the basement door.

Beyond the stereotypes, however, there are disturbing realities. Debt statistics on Millennials show that they have more debt than any other age group.

Millennials hold an estimated $1.1 trillion of America’s $3.6 trillion in consumer debt, according to the financial firm UBS. A 2017 UBS survey found that 52% of people ages 18-34 were worried about defaulting on any loan over the next 12 months.

That not only leads to financial problems, psychiatrists say the stress can cause health problems.

How can you avoid the Millennial Debt and Anxiety Syndrome?

First, don’t confirm what all those geezers think. They love to talk about how they had to walk 10 miles to school each day without a Google Maps app, but they ignore the daunting economic and social forces that not even Google can guide today’s 18-to-34 demographic around.

We’re talking about the Great Recession, globalization, the nations’ health care fiasco, etc. If you’re a Millennial (or anyone else) there’s not much you can do about those.

You can, however, do something about avocados.

Yes, the super fruit has become a symbol of Millennial excess, thanks partly to a viral video from Australian real estate magnate Tim Gurner. Appearing on Australia’s version of “60 Minutes,” he chided Millennials for their love of avocados.

“When I was trying to buy my first home, I wasn’t buying smashed avocado for $19 and four coffees at $4 each,” Gurner said.

That didn’t sit well with Millennials, but there is some truth in Gurner’s observations. A 2017 study by Princeton Survey Research Associates International found that 54% of younger Millennials eat out at least three times a week, compared to 33% of Gen Xers and 32% of Baby Boomers.

Almost 60% of non-Millennials said they don’t buy brewed coffee or tea, while 29% of Millennials do at least three times a week. And we’re not talking about 50-cent cups from the convenience mart.

About the only beverage more expensive than coffee is booze. Only 24% of Gen Xers say they go to a bar more than once a week, while 51% of Millennials say they do.

Of course, you’re expected to hit the town more when you’re young and can bounce back quickly from hangovers, but those dining, drinking and dancing bills have more economic impact on this generation than previous ones.

That’s because this generation is saddled with challenges their parents and grandparents never faced, starting with student loan debt.

Tuition at Yale cost $2,550 in 1970 and $6,210 in 1980 and up to $14,000 in 1990. A year at Yale will now set you back $66,445 for tuition, room and board.

Not every kid went to Yale, of course. But a lot of kids went somewhere that costs far more than it used to. That’s why student loan debt has skyrocketed to $1.47 trillion. The average household with such debt has $49,000 in student loans to pay off.

The plodding economic recovery and automation have made finding a job a completely different experience than what Baby Boomers went through. The average Millennial makes $35,000 a year. It’s not easy to be a dining and social butterfly on that income.

Even avocados are conspiring against Millennials, with the wholesale price doubling from 2016 to 2017 to $28 a box for a 22-pound box.

What’s a poor Millennial to do?

Live at home, of course. In 2014, for the first time in 130 years, adults 18-34 were more likely to live in their parents’ homes than with a spouse or in another household. That helps explain why by 2016 only 32% of home sales were to first-time buyers, a 29-year low.

The last thing many Millennials need is mortgage debt.

“Today’s Millennials have more debt than ever, and studies show that there can be long-term health effects on the stress this causes,” said a report from Yellowbrick, a Chicago-based psychiatric center. “While Baby Boomers and older American have largely looked at ‘lifestyle choices’ for the main reasons behind Millennials refusal to ‘grow up,’ the signs all point back to a hefty amount of student loan debt – debt in quantities previous generations didn’t have to deal with.”

Sometimes, it’s too much to deal with. Millions of Millennials have sought relief through debt management programs.

Nonprofit organizations provide counseling, consolidate debt and work with lenders to lower interest charges on credit card debt. The one-time monthly payment is lower than what the consumer was paying separately to banks, card companies and other lenders.

It’s a proven cure for Millennial Debt and Anxiety Syndrome. And developing sound financial habits also offers a unique side benefit to Millennials.

They can tell all those Baby Boomers and Gen Xers to take an avocado and shove it.


SOURCES:

(Perez, M. and Durisin, M.)(2017, April 28). Avocado Prices Are Skyrocketing. Retrieved from https://www.bloomberg.com/news/articles/2017-04-28/guacamole-costs-to-jump-as-avocado-shortage-sparks-record-prices

(Hernandez, R.)(2017, April 29). Millennials owe a record amount of debt and it could become a huge drag on the economy. Retrieved from http://www.businessinsider.com/record-millennial-debt-a-drag-on-the-economy-2017-4

(NA)(2016, Dec. 8). Millennials and Debt – The Long-Term Effect. Retrieved from https://www.yellowbrickprogram.com/blog/millennials-and-debt-the-long-term-effec

(NA)(2016, Oct. 5) How Millennials are redefining family finances. Retrieved from https://www.ubs.com/magazines/wma/insights/en/investor-watch/2016/how-millenials-are-redefining-family-and-finances.html

Joey Johnston
jjohnston@incharge.org

Joey Johnston has more than 30 years of experience as a journalist with the Tampa Tribune and St. Petersburg Times. He has won a dozen national writing awards and his work has appeared in the New York Times, Washington Post, Sports Illustrated and People Magazine. He started writing for InCharge Debt Solutions in 2016.