11 Aug Can Millennials Find Jobs to Repay Their Student Loans?
It might be difficult to realize it with all the presidential campaign hoopla, but there are other interesting stories in the news that should capture our attention. On one hand, it appears as though the economy is recovering and more jobs are being created. But, on the other hand, we are still reading about a trillion dollar debt crisis in student loans that could pull down the economy again.
The group most affected by these competing stories is the Millennials. Roughly aged between 18 and 34, the older members of the generation have been buffeted by the economic winds, while their younger siblings might be seeing nothing but clear sailing ahead. While most Millennials agree that a college education is necessary to secure a better quality of life, there is great discussion about whether they will be able to repay the students loans which paid for that education.
Here is some interesting background on the job situation and how it affects today’s up-and-coming workers:
• Baby Boomers Are Retiring in Record Droves: The older generation has clogged up the career track for years, but it may finally be opening as the boomers retire. For the first time, it is expected that Millennials will outnumber their parents and grandparents, and will finally begin to take their places in the work force.
• Their Education Is Starting to Pay Off: The vast majority of Millennials has a bachelor’s degree, and probably paid for it with student loans. There were a few years of struggle and maybe some more time living at home with mom and dad than originally planned, but now things are beginning to look up again. They are finding jobs, getting promotions, changing careers and starting their own businesses – all on their own terms.
• They Do Pay Attention to Politics: With their instant access to the digital world, today’s voters are more tuned in to politics. They just tend to look at it with a more wary eye, and dissect everything in the social media world. Those running for president and other political offices better pay attention, and have answers ready for questions about the cost of a higher education and paying for it with student loans.
Some of the student loan crisis can be traced back to the sheer volume of Millennials that went to college. As they borrowed individually, the total amount outstanding began to look ominously large. When the downturn in the economy diminished their likelihood of finding high-paying jobs, many of those loans unfortunately went into default.
In investing they always say that past performance is no indicator of future performance, and it is possible that the same may be true when it comes to Millennials and their student loans. Just because some had difficulty making payments, that doesn’t mean all will. As the Millennials finally begin to earn an income that is consistent with their education, we might even begin to see the student loan amount decrease.