Increased Cost of Living Is Setting Millennials Back
Many Americans are facing student loan debt that feels insurmountable, according to a 2018 survey by Student Loan Hero. This survey was conducted to challenge the idea that millennials have it easier than previous generations.
It turns out that this line of thinking isn’t accurate. Instead, young adults are facing a financial crisis that is largely caused by student loans.
Student Loan Balances Are Higher Than Ever Before
The cost of college tuition has drastically changed over the last several years. Student Loan Hero estimates that when millennials were born, a year of college cost an average of $3,190. When they reached college age, the yearly cost was $9,970. That is a 213% increase!
Because of rising tuition costs, graduates are facing high balances on their student loans. As a whole, the nation has more than $1.5 trillion in student loan debt. In 2018, graduates had an average of $29,800 in student loan debt and many of their parents were carrying Parent Plus loans, as well.
What About Increases in Income?
While it’s true that millennials are making more than previous generations, income hasn’t increased enough to account for the increased cost of living. Young adults in the workforce are making 67% more than adults their age did in the 1970s. Unfortunately, college tuition costs have become more expensive much more quickly than income has increased for millennials.
That’s not all. Rent is more expensive and so are home costs. The average home costs $205,000 and rent costs an average of $1,358 for millennials just starting their careers. This means that many are struggling to put money aside for a down payment while covering rent and student loans at the same.
This generation is delaying big milestones, like buying a house, getting married and starting a family because they don’t feel financially ready while trying to pay off so much debt. Almost half of the graduates with student loan debt believe it would have been better not to go to college if it meant being free from student loans.
The good news is that many millennials are adapting. Using creativity, they’re starting side hustles and carefully managing their finances to avoid missteps that could jeopardize their future.
~ Here’s to Your Financial Health!
Copyright 2019, FinancialHealth.net
