How much do Millennials affect America’s national economy? Are they drowning in student loan, credit card, and other forms of debt? Contrary to popular opinion, 1 in 6 Millennials has over $100,000 in savings, IRAs, or 401ks, among other investment strategies, and 47 percent have $15,000 or more saved. While Millennials are perceived by some in a negative light, these numbers prove that they are more financially responsible than previously thought, which may be surprising when compared with student loan statistics that convey a nation in financial crisis. Student loan borrowers may be able to enhance their fiscal responsibility by looking into new loan repayment plans, such as those offered by the Department of Education. Ameritech Financial is a document preparation company that guides borrowers through the process of federal repayment plan applications, such as those for income-driven repayment plans (IDRs).
How is it possible that 17% of Millennials are aggressively saving? It seems infeasible, especially considering the exorbitant costs associated with living and thriving in the modern age. For instance, it is more expensive to care for infants than go to college in 33 states. Other statistics point to student loan debt being the reason that 85 percent of borrowers are putting off buying first homes, perhaps because — as the numbers show — nearly 75 percent feel student loans make them financially vulnerable. Additionally, Millennials have real fears about when they will be able to retire. The average age of retirement is 62 years old today; however, it could take Millennials until the age of 75 due to high rent and student loan debt. If student loan debt is weighing them down, they could look into other loan repayment plans, like IDRs, to potentially improve the overall financial outlook.
“It is unfortunate that Millennials feel downtrodden by student loan debt,” said Tom Knickerbocker, Executive Vice President of Ameritech Financial. “We think that our clients should feel empowered about finances and the decisions they make regarding student loans. Perhaps IDRs could make life a little more affordable for them.”
Furthermore, the earnings of Millennials are much lower compared to their parents’ (Gen-Xers and Baby Boomers) wages at the same age. The potential reasons for this are innumerable: the Great Recession, changes in the workforce, poor job markets, and more. It seems that while many people complain about Millennials ruining the economy, or being irresponsible, that in fact, these new studies and statistics point to a more financially pragmatic image of their generation. If they could find a way to decrease monthly student loan payments, perhaps they would have more buying power in the national economy.
“Hopefully in the coming years the job market and other factors improve for Millennials. Some would say it is not their fault they inherited the current situation they are in,” said Knickerbocker. “Nevertheless, until then, they have options, and one of them may be to reduce student loan payments through a federal IDR. And if they need help with that, Ameritech Financial can assist with the document preparation.”