08 Sep Are Millennials Living at Home Longer to Pay Off Student Loans?
This is the year when the Millennials are expected to become a dominant force in society, finally beginning to outnumber Baby Boomers in the work force. As the economy regains strength, they are landing jobs so that they at last have some money to spend. They are not in a rush to get married, and are even holding off on buying a car.
The majority of Millennials has previously attended or is now in college, so they can gain an education to take better control of their financial lives. They have somehow gotten a bad reputation because of the amount of student loans they acquired to get that education. As the economy faltered, they experienced difficulty in finding high-paying jobs and paying off those loans. But, an analysis on Global Credit Portal says that the idea that Millennials are not good with money and other unflattering stereotypes is a myth. It goes on to say that they have great potential to reach economic maturity in the coming years, which could allow them to contribute to a renewed U.S. economy.
One factor cited in the generation’s delayed launch as an economic influencer is the amount of student loans its members are carrying. In order to obtain their degrees, they took on substantial student loan burdens and then graduated just in time to watch the economy plummet. There were few jobs available which would pay enough to allow them to make their monthly payments. Suddenly, the alarm was sounded about a student loan “crisis.”
Soon they became stigmatized as a “lost” generation, living on their parents’ couches. But was that really a strategic move on their part, as they waited out an economic recession? Clearly, the jobs that were available during that time were not offering enough salary to be able to cover living expenses as well as student loan debt. So it might have been a very strategic decision to try to earn enough money and save on expenses until the economic crisis blew over.
Now, however, those gambles might be paying off as the experience they accumulated becomes a valuable asset when searching for higher-paying jobs. At the same time, the huge Baby Boomer generation is beginning to retire in record numbers so there is finally some movement at the top end of the job and wage scale.
Despite the student loan debt that Millennials are facing, obtaining a college education is still one of the smartest decisions they could have made. It remains the single most important factor that can positively affect their lifetime earning potential. Aside from building up debt, they didn’t lose money during the recession. Wages are predicted to increase at a rate of about 3-4%, while fixed interest rates on student loans will remain the same.
So while they may have delayed taking the leap into independent living, maybe Millennials were making a smart decision after all. Besides, most parents actually enjoyed the company.