A college education is a dream for many individuals; whether you want to further your career, forge a new path, or just expand your mind, college is one way to do this. However, higher education comes with a price tag and many millennials are finding out the cost may be too high, not only financially, but personally as well.
Fully 45 percent of Americans with student loans and 56 percent of those between the ages of 18 to 29, have put off a major life event because of the burden of that debt. A new study may have the answer as to why so many millennials are struggling: more than half of the students surveyed (2/3 of this group being millennials), stated they did not receive enough information, or advice, regarding the financial risks of a college education.
Millennials are putting off major purchases
Millennials state they put off buying a new home, new car, and even getting married, due to the burden of student loan debt.
Experts say it doesn’t have to be this way.
They suggest that instead of putting life on hold, millennials should seek out a financial professional to put together a plan that shows how to allocate money toward debt reduction while also saving for your life goals (vacation, retirement, new car, etc.). Millennials may also want to consider consolidating debt with a private lender to get a lower rate. If one has a federal loan, they may want to consider using the income-based method to save money, while those in the public sector can take advantage of the program that allows loan forgiveness after ten years of employment.
Millennials, what can you do about this?
So what can you do to prevent seemingly insurmountable student loans? Know and explore your options. There are scholarships, grants, work programs, and other financial opportunities for those in need. You should fill out the FAFSA (Free Application for Federal Student Aid), even if you think your won’t qualify.
Also, consider completing your “basic” classes at a community college. Most community college are cheaper and offer a way to quickly complete the necessary requirements without breaking your budget. If you go this route, make sure to speak with the academic counselor at your preferred college to ensure these credits will transfer, otherwise you may wind up spending more money to retake the courses.
Why are millennials in such bad shape?
Why are millennials in the worst shape when they have been afforded the greatest access to technology? I’m not sure. As the study stated, in part, I am sure, they were not properly advised regarding loan rates, plans, and other financial opportunities. Also, they were probably not warned about the repercussions of taking out more money than you actually need.
Sure, it’s nice to have extra money for parties and vacations with your friends, but do you really want to pay off that trip to Cabo for the rest of your life? Wouldn’t you rather wait until you’re done with school and can afford the trip on your own? If financial advisers phrased thing like this, students would be less likely to take out more money than they needed.
Most college students taking out loans are fresh out of high school. They are finally getting a taste of freedom and the all-too-available loan is a little bit too tempting for some. For others it is a necessity, but they were not aware they had the option to shop around for the best rate, instead of accepting what the institution was offering at the time.
My take on my generation
I am the first person in my family to graduate from college. When I graduated high school, I knew nothing about the process, but I researched it. I went to the library to find out the bulk of what I needed; the rest I found out by asking other people. I learned about financial aid by speaking with an adviser at my college. Perhaps the problem millennials are having is not one of financial responsibility, but one of communication.
Better communication leads to a better understanding of what is expected and in a world where you can send a text message and get groceries delivered to your door, communication is quickly becoming an archaic skill. The bottom line: don’t be afraid to ask questions. It’s your money, your life, your education, and you want to get the most out of everything. You cannot do that by sending a text message, or accepting what one person tells you.
Do you research, have a plan, and conquer the education system without fear, regret, or putting your life on hold because your financial adviser is pushing you into something that sounds good, but could change your life (positively, or negatively) for the next twenty years and beyond.
#Millennials
Jennifer Walpole is a Senior Staff Writer at The American Genius and holds a Master's degree in English from the University of Oklahoma. She is a science fiction fanatic and enjoys writing way more than she should. She dreams of being a screenwriter and seeing her work on the big screen in Hollywood one day.
