How Student Loans and the Economy Conspire to Ruin Millennials in Debt

The generation born between the early 1980s and the early 2000s achieved or is well on the way to achieving adulthood. The closer they are, the more they realize that the modern world does not quite understand what to do with all the new toys it has at its disposal or what to offer them in return for their efforts. The result? Legions of graduates chipping away at a mountain of student debt that passed 1 trillion dollars in 2013, in an economy that cannot provide them with the money necessary to make a dent in it.

The First Half: Student Debt

The millennials may very well be one of the most well educated generations to date, with unprecedented access to information, knowledge, and the global markets. Yet despite that, they are facing financial instability, problems with employment, and difficulty in finding their place in life. Student debt is one of the root causes.

Tuition and boarding costs were always present, but millennials are the first generation to be hit with costs that are crippling them before they even enter the labor market. According to the Bureau of Labor Statistics and the National Center of Statistics, the cost of achieving an education has doubled in the past thirty years – and together with a larger number of people attending college led to a quadrupling of the debt.

What could be manageable for Generation X representatives is definitely less so for millennials. To manage $30,000 in student debt, the average graduate will point to a starting salary of $50,000 as a reasonable guarantee of a life safe from financial terror.

The Second Half: The Economy That Hates You

Of course, in order to earn that amount, you need to find a job that allows you to earn this figure. The problem is that millennials are not just experiencing ballooning debt, but also rapidly increasing inequality and wealth gap. It is the natural consequence of a process that started with Generation X, when the average income began to fall in comparison with the Baby Boomer generation.

Declining incomes, wealth, and quality of wealth are a fact, causing millennials to have trouble coping with the financial strain of debt they enter life with – and ending up even deeper in debt as a result. It’s a vicious cycle perpetuated by the ailing state of the national economy, the Great Recession, and the changes in economy. Technological breakthroughs and easy access to Internet gave rise to the sharing and gig economy, hailed as examples of millennial flexibility.

Trouble is, neither are enough to provide millennials in debt with enough money to handle their debt and earn enough money to stop accumulating debt and move upwards on the social ladder.

What Can Be Done?

Short of fundamental changes to the law and social convictions in the United States, it comes down to individuals to ensure their well being. That includes learning financial skills well before applying for student loans (to better understand what you’re signing up for and how, for example, interest is structured), carefully selecting where to apply for (popular, en vogue colleges tend to cost a pretty penny and often fail to deliver a comparable return on the investment; state or community colleges are a viable alternative, even if they’re démodé), and of course, not following the trends but acting on independent research.


If you’re a student seeking debt relief you have a friend in Van Horn Law Group. We are here to help.

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Published by
Chad Van Horn

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