“Generation Debt” Op-Ed

Who are Millennials? A quick Google search reveals a wide-ranging portrait of our generation that spans from an accepting, civic-minded group of curious entrepreneurs to an entitled, self-centered cohort of tech addicts whose personal interactions exist solely through a computer screen.


So which is it? Is there any strand that connects us other than that we happened to be born between 1982 and 1998? The answer is a little yes and a little no. We certainly defy a one-size-fits-all approach and reject broad-scale notions of our commonality. But we are also a generation shaped by the passage of time .


We were born as the Cold War ended and grew up in the shadow of the twin towers’ collapse. We were raised in an age of rapid technological growth and have been molded by its influence in our lives. We’ve risen to adulthood in one of the most economically trying times in recent history, in which unemployment soared, worker participation rates plummeted, and incomes stagnated. We’ve seen diversity bloom, the world go to war with terrorism, and privacy become nonexistent.


Each of these things, in their own way, impacted who we as Millennials have grown up to be. Diversity has made us accepting. Terrorism has made us patriotic (but also unwilling to accept a skewed balance between security and privacy). And the personal computing revolution has made us digital natives.


This is who we are, but what about who we are becoming? To be sure, each of these events and developments have set us on a general course that will be customized by individual twists and turns. But one increasingly pervasive and ever-more pernicious trend is impacting our generational personality in a way that will reverberate for decades: Student loan debt.


Since 2004 the total number of outstanding student loans has nearly quintupled, going from just over $250 billion to more than $1.2 trillion. That’s a combination of two main factors. First, the numbers of borrowers grew by about 50 percent between 2005 and 2012, and remains on a sharply upward trajectory. Second, the cost of college has soared, which has caused the average loan debt at graduation to soar by 28 percent between 2007 and 2013.


The growing loan balances coupled with a poor economy has led to an epidemic of delinquencies. Currently, nearly one in three Americans who are in the process of paying off their student loans are at least a month behind in their payments. More troublingly, about half of all borrowers have either defaulted, become delinquent, or failed to make any progress on their balance despite graduating years earlier.


Unsurprisingly, the flood of red ink rushing across young adults’ balance sheets is having a dramatic effect on their decision-making. Home ownership rates among Millennials are plummeting, while the number of “boomerangers” – those who have opted to move back in with their parents – is growing. The decision to get married and start a family is getting delayed, in no small part because it’s impossible to think about affording diamonds, diapers or day care when we’re still paying hundreds each month towards student loans. And the dreams and aspirations of young entrepreneurs are getting squashed by financial realities.


Fifty-four percent of the nation’s MIllennials either want to start their own business or have already started one and yet the percentage of new businesses founded by 20-to-34-year-olds fell from 34 percent in 1996 to 23 percent in 2013.


Young adults will inevitably hear a lot about how the presidential candidates hope to lift the burden of student loan balances off the collective back of Millennials. But we as a generation must look closely at the details. We need a plan that makes college more affordable, not one that makes student loan payments more reasonable. The difference is subtle, but important. The former is the product of a true reformer who seeks to attack the disease, not just the symptoms. The latter is the trick of a political conjurer, one who understands that capping payments or forgiving balances is little more than rebranding personal debt as national debt.


Our generation is identified and guided by our shared experiences. Debt, unfortunately, is one of those. But, with the right person in the White House, it needn’t be a generational characteristic that defines our future.