You have heard time and again that student loan debt is taking over the lives of millions of millennials.
Well, the situation may be even more bleak than previously thought, according to new data collected by the U.S. Department of Education:
“The total amount of outstanding direct student loans stood at $855 billion at the beginning of the first quarter of 2016, distributed among over 30 million recipients. (This total does not include loans still outstanding under the now-discontinued FFEL program, which guaranteed private-sector student loans.),” according to the Foundation for Economic Education.
With this in mind, an average of at least $28,500 of student loan debt is spread across more than 30 million people.
Even more startling, barely half of these student loans are actually being repaid!
Here are the current statistics of the roughly 46 percent of student loans that are not currently being repaid:
- 10 percent are delinquent;
- 13 percent are in deferment;
- 14 percent are in forbearance;
- 8 percent are in default.
Hand-in-hand with this huge lump of student loan debt, it’s no surprise that the majority (51.8 percent) of millennials have less than $1,000 in savings.
How can an entire generation be expected to pay their debts with barely enough income to cover their massive student loan payments?
It can be argued that these students should not have accepted so much in loans, should have picked a better career path or should be much more educated about personal finance and poor spending habits.
The poor spending-on-credit habits of baby boomers have directly influenced how millennials spend their money with their hopes of chasing the American dream, but at what cost?
This lack of savings and the overwhelming debt are having incredible effects on the lives of this generation. People are not buying as many homes, choosing to either rent or move back in with parents. Birth rates have declined 15 percent between 2007 and 2012 (The Washington Post), and marriage ages have jumped to 27.1 for women and 29.1 for men (U.S. Census records).
Weighed down by debt, millennials will be paying their student loans off for the remainder of their lives, unless drastic change comes soon.
This is where entrepreneurship really comes into play — the devout belief that a groundbreaking product, idea or business is right at the tip of your brain, or the thought that if you are going to be in debt forever, you might as well work for yourself and do what you love!
Sixty-seven percent of respondents said starting their own business was their goal, while only 13 percent wanted to become a CEO or president by climbing the corporate ranks.
Through technology such as computers, phones and gaming systems, the most interconnected generation to ever exist is in love with becoming independent in all aspects of life.
While most of these people will never become a Steve Jobs, Mark Cuban or Elon Musk, there is finally a spark in small business coming to life.
This information was provided by BroCorp co-owner Mitchell Wright.