Millennials are delaying adulthood because of crushing student loan debt
Cynthia Roberts thought she’d work in digital marketing when she graduated from college in 2009. But the economic crash and record unemployment rates made it difficult for her to find a stable position. Instead she worked a string of low-wage jobs, from selling merchandise at concert venues to answering phones at a call center.
When she interviewed for entry-level work, she was told that she was overqualified. “I was stuck in this awful limbo,” said the Rochester Institute of Technology graduate.
After working a part-time customer service job at Delta Air Lines and later as a manager in a Boston hair salon, the 29-year-old finally landed a position that would enable her to start making payments on her student loan, which now totals more than $70,000 with accrued interest.
“I can’t afford to have the wedding I want, can’t afford to start a family like I always planned, and I still don’t make enough money to not live paycheck to paycheck despite eating macaroni and cheese out of a box three nights a week,” said Roberts, who currently works as a leasing consultant at a property management company. She eloped late last year mainly to get health insurance, she said.(Read her full story here.)
Robert’s experience is one shared by many millennials affected by crushing student debt, which now totals an eye-popping $1.3 trillion. Student loan defaults have also soared, drawing parallels with subprime mortgage crisis that caused the housing crash.
A LinkedIn survey of current students and recent graduates found that rising tuition costs and student debt are causing millennials to delay the markers of adulthood such as getting married, buying a home and starting a family. Some are also foregoing advanced degrees in order to avoid taking on more debt.
Tuition and fees at public, four-year schools have nearly doubled over the past 15 years, while costs at private, nonprofit schools have jumped 45%, according to college cost tracker College Board. The tuition burden is especially taxing on current college students who attend private colleges, the LinkedIn survey found.
More than 70% of millennials surveyed said they have been affected by the increasing costs of tuition. Some 61% said they have a student loan, with the median debt falling between $20,000 and $25,000. Thirteen percent of millennials mentioned that they have more than $50,000 in student loan debt.
To cover university costs and other living expenses such as books, housing and food, some LinkedIn members who took the survey said they’ve had to take out additional private loans, rely on credit cards, and work multiple jobs, which affects their ability to engage fully with their education.
“By the time I graduate with a bachelor’s, I’ll be $50,000 in debt.”
Cody Dostal is a junior at Capella University, a for-profit, online school in Minneapolis. He spends 70 hours a week working two jobs, on top of going to school full time. “It’s rough,” wrote the 20-year-old information security major. “By the time I graduate with a bachelor’s, I’ll be $50,000 in debt.” (Read his full story here.)
Respondents who were able to escape debt altogether or pay back much smaller loans were fortunate enough to receive financial support from their families or significant other, or they had scholarships that covered the costs. But as the survey found, the burden of student debt can have an unexpected ripple effect: the parents who saved but didn’t save enough, the younger siblings who feel pressured to attend more affordable schools, and the spouses or significant others who inherit that debt.
“You can grow up to be whatever you want to be, but it will take you the rest of your life to pay for it.”
That was the case for Meagan Weaver, who married into more than $55,000 in student loan debt. Weaver says she and her husband barely make enough for living expenses with their full-time jobs. She plans to take on extra work as a waitress and her husband drives for Uber on the side.
“I am now living the new American dream that so many of my generation is experiencing,” wrote Weaver, a 2011 graduate of Ohio State University. “You can grow up to be whatever you want to be, but it will take you the rest of your life to pay for it.”
To make sense of the student debt crisis and the ripple effect it has had on families, we’ve asked students and recent graduates, LinkedIn Influencers, policy makers, financial advisors, companies and more to weigh in and share their stories and perspectives.
Is college worth the debt? How do we make higher education more affordable? What can students and families do to avoid the pitfalls of debt? Is the university model broken?
From a graduate student’s extreme sacrifices to pay off his loans to a company perk that covers the cost of a college degree, here’s a taste of the best #StudentDebt stories that we’re highlighting in the coming weeks.
Jim Rossi lived in his Chevy Blazer to pay off his Rutgers degree faster. He’s nowtaking shelter in a Nissan Xterra to knock off loan debts while earning a second master’s degree from UC Berkeley. He writes,
“I see Xterra living as an innovative business decision.”
Madrid’s IE Business School Dean Santiago Iñiguez details how business schools earn their incomes and how that model affects tuition costs.
The VP of financial aid at Western Governors University Bob Collins writes about the high costs of college and WGU’s innovative approach to keeping tuition costs low.
JetBlue Chairman Joel Peterson writes about a company program that helps crewmembers soar above college debt.
Financial planner Carrie Schwab-Pomerantz offers some practical advice for students before — and after — they borrow student loans.
LinkedIn Survey Methodology:
The LinkedIn Online survey was conducted April 18-25, 2016 among 355 undergraduates and 330 recent graduates who graduated after 2006. All of them are LinkedIn members. Margins of error: +/- 6%
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