Student Loan Debt: Are Millennials Saving?

Young Americans have the reputation of spending above their means and relying on parents to support them until reality hits post-graduation. As institutions raise their tuition prices, Millennials have the third-highest student loan balance. For years the federal government has searched to solve this issue. The main concern is if college students are saving enough to sustain their future payments. 

Recent studies have shown that Millennials are saving for retirement more than they are accredited. This past January, Bank of America's 2020 Better Money Habits Millennial Report stated that Millennials are stashing away savings as early as 24 years old. This is over ten years earlier than previous generations, and shows hope as Baby Boomers and Gen X begin to be outnumbered in the workforce. According to this report,  Millennials are proving to have better spending habits, as research shows a majority of the generation is continually checking their account balances and are equipped to using a budget rather than free-spending. 

The world is currently combating the Coronavirus pandemic and as a result the global economy as well as the United State’s economy is being greatly impacted. Three out of four economists predict a U.S. recession by 2021, according to the Washington Post.

Millennials are turning a new page and appear to be far more money-conscious than expected. The era of anxiety plays a significant role in the actions of America's young people. Millennials are suffocating from the mass amounts of college debt they are all experiencing. According to Yahoo Finance, the average monthly student debt payment is about $400 per month.  Graduates enter and exit college with the fear of missing payments and going into further debt. They are less concerned with credit card debt and saving for family and education. 

“Millennials are turning a new page and appear to be far more money-conscious than expected. ”

The competitive college environment provokes a sense of succeeding, but not many young people are instilling plans to get there. Students are attending higher-level education without having funds on hand to afford it. They then glide through schooling with high hopes that the economy will be able to back them when the payments become current. The issue with this mentality is that the economy is unpredictable, and jobs available immediately after graduation are not always attainable. 

Older Millennials are concerned with long term payments and debt as they put more money aside each year to combat their fears. T.Rowe Price conducted studies on Millennials’ spending habits, which show that the majority of them are willing to make sacrifices for their economic stability, whether that be in their lifestyle or their career. If the younger portion of the generation follows the lead of those already in the workforce, they will be able to combat the financial pressure that the entire country is facing, especially in a time of an economic downturn. 

The world is currently combating the Coronavirus pandemic and as a result the global economy as well as the United State’s economy is being greatly impacted. Three out of four economists predict a U.S. recession by 2021, according to the Washington Post. If private loan companies do not extend payment dates, students are left with more debt than they already have. During a time of uncertainty, young people need to stay aware of the country's economic stance to plan and save properly.