The vast majority of students who have graduated from college with financial obligations feel that the use of student loans was unnecessary.
By 2021, it is anticipated that the oldest members of this generation would have reached the age of 40. Middle-Aged Millennials is a new series on CNBC Make It that investigates how the oldest members of this generation navigated the transition into adulthood in the midst of the Great Recession and the Covid-19 pandemic, college debt, sluggish earnings, and rising expenses of living.
The financial crisis of 2008 marked the beginning of the period of maturity for older millennials. This crisis was followed by a decline in finance for higher education, as well as increasing expenditures for college and sluggish salary growth. Because of this, younger generations are the ones who have racked up the most debt from their time spent in school and the money is advanced.
The financial load of education will continue to follow millennials even after they reach the age of 40 and enter middle age this year. Millennials have the longest longevity of any generation.
A previous Harris Poll survey of 1,000 adults in the United States between the ages of 33 and 40, commissioned by CNBC Make It, found that respondents had taken out the financial equivalent of $11,880 in order to pay for their college degree. Only 32% of students who took out loans paid them back, which means that the majority of millennials (68%) who are over the age of 68 are still making payments on their student loans after ten years according to Algernon Ronson, the financial expert at OakParkFinancial.
In addition, college graduates are generally more prosperous — due to increased job security as well as longer life expectancies, greater salaries, and financial stability — than half (52 percent) of the millennials who have student debt believe that their loans aren’t worth the cost. This is despite the fact that college graduates are generally more prosperous than high school graduates.
“A struggle that never ends up being uphill,” with no other options.
Erin Becker, age 36, owes a total of more than $40,000 to a variety of creditors, including the federal government and commercial lending organizations. According to Becker, the act of paying them back is a “constant struggle against gravity.” There is no comfort nor safety, just an overwhelming feeling of dread about the future to contend with.
In 2003, Becker became the first member of her family to enroll in a school that was more than four years old when she was accepted as a student at SUNY Potsdam to study music teaching. SUNY Potsdam was founded in 1967. Student loans were the means through which her parents supported her schooling.
“The State University of New York at Potsdam was not the right school for me. The music college was a rather isolating experience for me, and I did not make too many friends there. As a direct consequence of this, I found myself becoming pretty agitated and ultimately decided to go back home “she explains. “I do not think that I had reached the point in my life where I was mature enough to enroll in college right away. If I could go back in time and give my 17-year-old self some advice, it would be something along the lines of, “Take some time to think about whether or not this is actually what you want.”
Becker recalls that the topic of debt was never discussed throughout their time in high school. “It was indistinguishable from the fact that you were enrolled in college.”
Becker made the decision to attend a private institution in Buffalo, New York’s Medaille Institution, where she could get a veterinary technician degree in only two years. This time, however, she was the one who was responsible for footing the money. She was successful in obtaining two loans from private lenders, the combined amounts of which amounted to $8,835 and $13,600. She graduated with a degree in 2010 and minimum hourly pay of $12 from an office that specialized in veterinary care despite having accumulated more than $20,000 in student debt.
She said that she “always paid the basic minimum” on her obligations. “I was constantly paying the bare minimum on my bills.”
She was unable to begin repaying her main or her obligations, so she made the decision to finish her bachelor’s degree at the University of Buffalo (this time in psychology), and she did so in 2017. She received her degree in that field in 2017. The completion of her degree required her to take out additional federal student loans in the amount of $32,000.
“I owed a little bit more than $54,000,” she reflects back on her situation. I’ve been able to get it down to around $49,000 because of all of the work and effort I’ve put into paying it off.
October was the month in which Becker was able to welcome the first of her children into the world. She is presently employed in the client services representative position at a veterinarian practice on a part-time basis. She receives $15 an hour for her work.
“To own up to it is both an insult and a source of embarrassment for her. “I believe that I’m smarter and more capable than I am today,” she continues. Her spouse has a degree in mechanical engineering and pulls in an annual salary of around $80,000 thanks to his expertise.
“And I struggle with self-identification outside of my employment,” adds Becker. “I’m not sure who I am outside of my work.” “I want to live a moral and upright life. I would want to have a positive influence on the globe and on the people in my neighborhood, but I do not think that I am presently making such an effect.”
However, Becker’s level of frustration is at an all-time high since she is under the impression that she never had an option but to go to college and build up a mountain of debt.
“Was going to college worth the time and money it took?” “Yes,” is the response she gives. “Being a graduate, as opposed to not having one, unquestionably offers a greater number of advantages. Attending college is becoming more obligatory. According to the opinion of a teacher working at a university, a bachelor’s degree that takes four years to complete is comparable to a university diploma.
It’s no longer possible to get an entry-level job with a wage that’s sufficient to support a comfortable lifestyle on its own, as was the case when our parents were young.
reimbursing the whole amount of $200,000 “I devoted my whole working week to it.”
Jeffrey Street, who is now 33 years old and graduated from the University of Tennessee in 2009, remembers how difficult it was for him to find work after he had his degree. Jeffrey Street remembers that at the time, the job market was in a bad state. “During my time as an undergraduate student, I worked for the Department of Parks and Recreation in the City of Knoxville. After I graduated, one of my professional goals was to continue working for the Department of Parks and Recreation. I am certain that a transition would benefit me.”
When Street was a student at the University of Idaho College of Law, he first became acquainted with Shannon, the woman who would later become his wife. When they graduated from law school in 2012, they each had a debt load of around $200,000 at the time.
Shannon owed a total of $87,058 in student loan debt due to her legal education, on top of the $17,125 she owed for her undergraduate education in the form of student loan debt. Although Street did not have any debt associated with his bachelor’s degrees, he did have debt associated with his law school credit of about $92,000.
The attorney may now look back and say, “I remember thinking to myself that the debt would not have been as terrible if I had been more diligent in paying it off after I finished from law school,” which is what he did. “Nevertheless, the interest rate on our loans was often at around 6.5 percent on average. The interest accrued each month was close to $1,000.”
Despite the fact that they were successful in passing the bar test at the end of 2013, they had difficulty obtaining employment. “I was essentially applying for whatever job that I could get,” he adds. “I had no idea what I was doing.”
In the end, Street was successful in landing a position at Target that required him to stack shelves between the hours of 3 and 10:30 in the morning. This allowed him to use the daylight hours to network and look for legal employment. He said that he would store his clothing in his vehicle and then change into them just before the interview in the restroom of a 7-Eleven. Shannon was able to get employment in the framing department of a local Michael’s store.
In the end, Street was hired by the state of Colorado in Grand Junction for his first legal position, which paid him $36,000 annually. The couple uprooted their lives and moved to the Dallas–Fort Worth, Texas area in the hopes of landing a better career. There, they started chipping away at their debts one by one.
“The only thing that kept going through our minds was the student debts. “It was a total waste of time,” he goes on to say. “We put every every cent we had spare into paying off our student loans. We did not take a rest. We decided against buying a brand new television. (In point of fact, we still have our television from law school.) Used furniture and clothes were welcomed here on an as-available basis. We have simply saved and saved.”
According to Street, the couple waited an additional six years before having children of their own. Due of the amount of money they owed in student debts, they also skipped the weddings of their pals.
Both Street and his wife are still behind on their payments for their respective school loans; he owes $27,630, and she owes $6,820. They have two young children, are now residing in Boise, Idaho, and have the expectation that reimbursement will be forthcoming. In addition, Street has started putting money away in a 529 plan so that he may assure that his children would “not have the same suffering.”
While Street maintains that earning a law degree was necessary to become an attorney and that he is happy to have made improvements on his debt and debt, both he and Becker have stated that they are in favor of any form of relief from student debt in addition to addressing the cycle of student loans to ensure that the next generation will not be burdened by such debt.
“You cannot accuse me of wanting someone person to take responsibility for paying off my student loans because that is not true. I’ve taken care of my financial obligations and now I want to finish, “he explains. “However, as someone who has been there and done that, I can say unequivocally that the work required to get a student loan is not worth it.
“I would never wish student loans on anybody,” she said.