Student loan debt is hampering multiple generations – InsuranceNewsNet

Student loan debt is impacting even older Americans.

Critics said President Joe Biden’s hints that he would consider canceling student debt amounted to a ‘bribe’ for young voters, but a survey showed even baby boomers are struggling with student debt.

A majority of Americans (59%) say they have delayed financial decisions because of a student loan in a Bankrate poll conducted earlier this month.

Gen Z and millennial borrowers struggle the most across the board, with nearly a third of millennials not saving for emergencies (31%) or not buying a home (30 %) due to student debt.

Student loan debt is hampering multiple generations
Millennials are feeling the student loan crisis.
Student loan debt is hampering multiple generations
Generation Z is also affected by student loan debt.

But Gen X and Baby Boomer borrowers are also delaying their financial decisions because of student debt. More than a quarter (28%) of Gen Xers don’t save for emergencies or retirement (26%). Nearly a quarter of baby boomers are not paying off other debt (24%), saving for emergencies (23%) and not saving for retirement (22%).

Student loan debt is hampering multiple generations
Gen Xers are struggling in part because of student loan debt.
Student loan debt is hampering multiple generations
Even baby boomers face leftover student loan debt.

Progressive lawmakers last year called on the Biden administration to write off up to $50,000 in student loan debt, arguing that the debt has lowered the rate of homeownership and retirement savings. They also requested that the cancellation not be counted as taxable income.

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Biden promised during his campaign to rescind up to $10,000, which he has yet to do. But the administration recently extended the pandemic pause on student loan repayment until August 31. For the more than 45 million people who owe a total of $1.6 trillion, that would mean they would start getting bills for the loans just before the November election.

This week, members of the Congressional Hispanic Caucus said Biden discussed the loan forgiveness in a meeting. Activists pressured Biden to fulfill his $10,000 campaign pledge.

Republican lawmakers blasted the idea, with Utah Sen. Mitt Romney calling it a bribe, saying “desperate polls call for desperate action.”

Student loan debt is hampering multiple generations

Romney said forgiveness would be a slippery slope to forgiving other debts. Although Romney’s tweet joined a chorus criticizing the idea, others ridiculed Republicans’ recent bailout concerns. A tweet reminding readers of the bank’s bailout after the 2008 crash received more than 150,000 likes.

Student loan debt is hampering multiple generations

Although the argument against loan forgiveness has primarily accused Biden of pandering to younger voters, the Bankrate poll shows student loan debt affects a wide range of demographics.

The percentage of people who delay their financial decisions decreases over the generations, but they are still present. Nearly three-quarters (74%) of Gen Z borrowers and 68% of Millennial borrowers have put off financial decisions, compared to 54% of Gen X and 42% of Baby Boomers. Gen Z said they are more likely to put off buying or leasing a car, while Millennials are more likely to put off saving for emergencies and buying a home.

A majority of respondents (59%) said getting a degree helped them with their careers and earning potential, but younger cohorts had the most regrets. Nearly a quarter of Gen Zers said they wanted to work more while in school, apply for more scholarships, get a different degree, or go to a less expensive school. Only 15% said they would do something differently.

Student loan debt is hampering multiple generations

Steven A. Morelli is editor for InsuranceNewsNet. He has over 25 years of experience as a journalist and editor of newspapers and magazines. He was also vice-president of communications for an association of insurance agents. Steve can be reached at [email protected]

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