8 Brutal Signs We Will Lose Millennials Without Loan Forgiveness
These days, a college has become as much of a requirement of modern education as getting one’s diploma.
While there’s a lot to be said about this form of education, the problem is that many now believe there is a very real student loan crisis unraveling in front of us.
Amongst other things, we have a whole generation that is drowning in debt. Without loan forgiveness for them, they’ll most likely never recover.
Student Debt Can’t Be Wiped Away
Before we get into these eight reasons, it’s important to point out that student debt is never simply wiped clean. Even if someone declares bankruptcy, the debt can’t be defaulted on.
This is why student loan forgiveness is the only option for saving this entire generation from the debt they’re currently saturated in.
The Debt Balloon Exceeds $1 Trillion
This is definitely not a small problem either, so please don’t take that last line as hyperbole. The amount millennials owe in student loan debt now exceeds $1 trillion and doesn’t show any signs of slowing down.
It got to this point because of many reasons, but three common ones are:
- Low-interest rates
- Easy credit
- Irresponsible behavior
More and more, the size of this debt has been featured in the news with many worried that it’s going to become a bubble that rivals the one we saw with real estate.
We are all going to be in a lot of trouble when it pops if we don’t do something now on a massive scale.
It Costs More Than Ever to Save for Retirement
I recommend people set aside 20% of each paycheck of retirement. The problem is that, without loan forgiveness, most millennials simply can’t do that if they’re also going to afford to pay down their debt every month.
Having to choose between the two is not going to end well. Obviously, the vast majority will opt for paying down their debt, but then they won’t be able to retire – perhaps at all.
Most Graduates Don’t Have Good Jobs
This is an especially sad indictment of our current education system, but it’s the truth that most graduates won’t get a job in the same field of their degree.
Therefore, another reason to push for loan forgiveness is because millennials are settling for jobs that simply don’t pay well. Combine that with the point above, and you have a whole generation that is not only swimming in debt but is also struggling just to get by.
Loan Forgiveness Could Literally Save Their Lives
According to economist Anthony Orlando, the author of Letter to the One Percent, loan forgiveness is really a matter of life and death. He has said, “Let’s not mince words. Student loans are killing people.
People need to understand just how big a problem we’re talking about: Americans owe more in student loans than on all their credit cards combined.”
That certainly puts a dire sense of urgency on the issue.
This Debt Is Getting in the Way of Investments
Having large amounts of debt keeps people from becoming investors. After all, you can’t pay down debt and invest.
This is always a problem, but when it’s happening across an entire generation, we might have to find out the hard way what happens to our economy when millions aren’t putting money into like they normally do.
It Affects Everyone
Not all millennials have student loan debt, of course. Unfortunately, the large number that do then go on to affect other millennials and everyone else.
Orlando also had this to say on the matter: “Don’t fool yourself into thinking you’re immune if you don’t owe a student loan yourself. The people who have student loans are consumers. They’re investors. They’re potential homeowners. If it’s a problem for them, it’s a problem for you.”
Without loan forgiveness, these millennials will continue to bring each other down, economically. The effects will reach out and impact other generations, including those who come after.
Credit Scores Are Plummeting
All this debt mixed with purchases on credit is creating a cycle for many millennials whereby their credit scores are damaged. That’s never a good thing, but at this age, these young people are far more likely to struggle with repairing those scores.
As a result, their purchasing power and other important metrics are also negatively impacted.
Without some form of student loan forgiveness, these people may be a decade or more away from ever getting their credit scores back to an acceptable level. This could have a huge, irrevocable impact on the economy as time goes on.
The Problem Is Affecting Lifestyles in a Big Way
All by itself, the level of student loan debt that exists is terrifying. What makes it worse, though, is that it’s combined with other problems. For example, credit card spending and easy access to peer-to-peer lending.
Not so long ago, once you graduated, you were on the fast track to buying a house. Now, though, millennials are graduating and actually finding more ways to amass ever greater amounts of debt. This is why so many have opted to simply live at parent home basement and get second or third jobs.
It is getting worse. As you’d expect, working all those jobs and living at home make it nearly impossible to start a family. That has a domino effect on the economy too. This goes far beyond people simply not buying homes and cars.
At the moment, it doesn’t look as though student loan debt is going away. Actually, it’s probably a time bomb that’s only getting worse.
There’s also no reason to think that those who are encumbered by this kind of debt are somehow going to be able to pay for their own salvation.