Millennials' ball-and-chain: Student loan debt

By:  Hadley Malcolm

For many 20- and 30-somethings, paying off the cost of college takes priority. Marriage, a house and family will have to wait.

Shayna Pilnick, 28, would like to buy an apartment but can't afford a mortgage.

Jacqueline Mannino, 23, and her boyfriend, Benjamin Prowse, 26, want to get married.

Jacob Childerson, 24, and his wife, Jennifer, 25, wish they could start a family, but they live with Jennifer's parents.

What's holding them all back: tens of thousands of dollars in student loan debt. Like countless Millennials across the country, they find themselves tethered to that debt load, stuck between the desire to become fully independent adults and not being able to afford the financial and cultural milestones traditionally associated with young adulthood.

Rising tuition costs and an anemic job market are feeding this vicious cycle, as a generation with more student loan debt than any other is struggling to find its economic footing.

This confluence of economic trends makes Congress' impending decision on student loan rates all the more critical for today's college students. New federal student loan borrowers may see their interest rates double unless lawmakers strike a deal to extend a 2007 law that cut the rates. The law expires July 1.

"You could have generations that never get in the economic mainstream," says Ted Beck, president and CEO of the National Endowment for Financial Education. "If you never get into the whole U.S. economic system because you've been held back by too much early debt ... we could have a lot of people who just never really come anywhere near their potential."

A report out last month from the Consumer Financial Protection Bureau suggests myriad ways in which student loan debt may be having a ripple effect on the economy. Based on more than 28,000 comments submitted by consumers and industry leaders, the report found that debt held by millions of Millennials may be forcing this generation to:

  • Put off home ownership
  • Divert money from retirement accounts
  • Impede the ability to take small-business loans
  • Forgo securing car loans

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