Good news, Millennials! If you were born between the 1980s and early 2000s, statistics say you’ll probably live with your parents longer than previous generations, and wait until you’re older than they did to have children or even get married. You’re also probably holding off on making large purchases like buying homes or new cars.
Despite being more financially frugal than previous generations, Millennials are still amassing large amounts of debt. There are three main factors driving this trend, and together they explain why millennials are facing more debt than ever.
Millennials are Struggling to Find Work in a Highly Competitive Job Market
For a generation that knows the importance of getting a higher education, you’re still likely to find yourself facing the obstacle of having a degree, but no experience. You also are up against lots of competition. Jobs are scarce, and people from all generations have found themselves fighting for the same few jobs. The rate of new jobs being created has been slow for almost a decade now, and there are many older workers who are putting off retirement, which means even fewer jobs for newer graduates. Some of you may be borrowing just to meet everyday living expenses.
Student Debts Are the Primary Reason for Millennial Borrowing
Paying for college gets harder with each passing year. The prices of tuition are steadily rising, and even the costs of textbooks can be far beyond reasonable. No education often means no chance of finding a decent job, so millennials find themselves taking on huge amounts of debts just to get degrees so that they can compete for the jobs available. Even students who choose to live off campus with their parents find themselves taking on student loans, and these loans often come with exorbitant interest rates. Unfortunately, these types of loans can’t be forgiven. Even in bankruptcy proceedings, student debts stick around.
In fact, the average student debt of a four-year graduate today is upwards of $23,000. If you’re among the millions of young Americans in debt, nonprofit debt management organizations like CreditGuard can help. They work with your creditors to reduce your debt and help set you up on a payment plan that works for you.
Millennials are Trying to Get Started in an Exceptionally Poor Economy
Even if you’ve been lucky enough to finish school and find a job, you still might find yourself facing a less-than-ideal economic situation. This is in part due to the fact that most millennials do not yet have the resources to help fuel the economy by purchasing large items like homes and cars. You tend to have small amounts of disposable income because of student loans. This means the economy continues to stagnate while you struggle to pay off the loans that were supposed to lead to a job in the first place.
Millennials are facing large amounts of debt in large part because of their desire to get a higher education and well-paying job. They wanted to get college degrees, but those degrees were expensive. They wanted to find good paying jobs, but those jobs turned out hard to come by. Millennials are hoping to see an economic turnaround, but in the meantime, it’s important to pay down those student loans so they aren’t permanently burdened by the costs associated with getting an education. If you’re a millennial struggling to make ends meet after college, know that you’re not alone. You’ve likely done all the right things. Keep striving to pay your debts down, and then hopefully, your economic situation will steadily improve.
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