• Millennials are facing an ongoing affordability crisis. Numerous factors are to blame, including student-loan debt, the lingering impact of the Great Recession, and increased living costs.
  • Millennials who took on student-loan debt have faced what one researcher called a “millennial Catch-22”: You need a college degree to get a good job, but degrees are so expensive that you’ll likely go into debt, which will set you behind in other ways.
  • At the same time, living costs from housing to healthcare have increased, meaning that life milestones and wealth creation get deferred. 
  • The takeaway: Millennials aren’t financially behind because they’re frivolous. But they are creating their own recovery.
  • Research cited in this article is from Business Insider Intelligence, which surveyed 2,007 adults ages 19 to 37 in November for the “Master Your Money: Learn & Plan Survey.”
  • This is the opening feature in Master Your Money, a yearlong series on personal finance for millennials.

The day Daniela Capparelli graduated, a letter was waiting in her mailbox.

But it wasn’t a congratulatory card. It was a notice from the loan agency Sallie Mae. Capparelli would owe $1,498 in monthly payments on her student loans that would, after reconsolidation, take 30 years to pay off.

The 35-year-old graduated from the University of Hartford in 2007, just as the Great Recession hit, with a degree in economics and finance and $150,000 in debt. She’ll have paid $309,000 with interest over the loans’ life.

“My student loans have been the center of my financial world,” she told Business Insider. “I have always felt a huge weight on my shoulders because of this astronomical financial burden.”

For the first five years after graduation, a full half of her income went directly into making loan payments. To afford them, she lived with roommates and racked up additional debt through paying for gas and groceries on credit. Until 2019, any money not put toward student debt went to living expenses and bills.

“My student loans have been the center of my financial world.”

Since finishing school, Capparelli has dutifully put a $60,000 dent in her mountain of student loans. Her payments now take about a quarter of the income she earns as a remote clinical quality coordinator for a radiology company. This past year, she started saving to buy a home outside Orlando, Florida, with money from a side job in remote customer service. 

While Capparelli’s student-debt burden is larger than that of many millennials who have taken out loans, the situation is familiar to many people her age who are juggling debt, meeting daily expenses, and pushing into homeownership, even if it means plugging into the gig economy to get there.

Daniela Capparelli, age 35, has paid off $60,000 of the $150,000 student debt she graduated with. She likened the debt to a mortgage, saying it’s prevented her from being able to buy a house. Photo provided by Daniela Capparelli

Daniela Capparelli, age 35, has paid off $60,000 of the $150,000 student debt she graduated with. She likened the debt to a mortgage, saying it’s prevented her from being able to buy a house. Photo provided by Daniela Capparelli

Unsatisfied with the many news articles that didn’t capture the actual millennial experience, Kenan Fikri, the director for research at the Economic Innovation Group, wanted to separate empirical facts about the generation from popularized fictions. A millennial himself, born in 1985, he told Business Insider he also had a personal interest in understanding what was happening to his peers.

After analyzing trends and research on “the Millennial Economy” for EIG, he realized that millennials had, unwillingly, been thrust into uncharted territory. As they creep toward middle age, the results are only beginning to bear out.

“In a way, millennials are part of a vast and accidental social experiment. We’ve never launched an entire generation with so much financial baggage,” he said, adding that they’re unique because they graduated into the throes of the recession. “Prior generations started building wealth right as they hit the labor market. By contrast, college-bound millennials spent the first decade of their careers digging out of debt.”

The story of the financially battered millennial is a tale at least as old as Instagram, but its significance is deepening in the new decade. Millennials are aging: They’ll be 20 to 38 in 2020, and the oldest are entering the precarious, expensive life stage of settling down with a home and family. Student-loan debt has in turn become a hot-button issue ahead of the 2020 presidential election, and many candidates have proposed policies to offset college costs. And while recession fears have at least somewhat abated, economic pundits spent much of 2019 debating whether one would occur in the next year or two — bad news for a set of 71 million people already financially behind the generations that came before.

In six months of reporting, I’ve spoken with dozens of millennials about their financial situations, which have ranged from delaying life milestones under crippling student debt to opting out of the workforce because of job frustrations. Economists, sociologists, and other researchers have walked me through how large-scale trends like a weak job market and soaring inflation can dampen how people build their wealth — and their lives along with it. Business Insider Intelligence surveyed 2,007 millennials to assess their financial attitudes and behavior in response to student-loan debt. 

All together, millennials are facing an affordability crisis triggered by three factors: student-loan debt, the ongoing fallout of the Great Recession, and rising living costs.

These aren’t just abstract trends. Across America, millennials are living through — and adapting to — an unprecedented economic reality. 

Debt and regret: Education was supposed to vault millennials ahead, but college costs put them behind

Millennials truly are different in terms of student debt. According to 2017 Federal Reserve data, 62% of adults ages 18 to 29 who acquired bachelor’s degrees incurred student debt, compared with 48% of adults ages 45 to 59.

The amount of money we’re talking about is staggering.

According to the New York Fed’s consumer credit panel, Americans owed a total of $1.5 trillion in student loans as of Q3 2019. That debt load was 70% higher than the $880 billion Americans owed on their credit cards that same quarter.

A marketing manager in Garrett, Indiana, said she was having “extreme anxiety” about her $30,000 in student-loan debt. The 26-year-old spoke with Business Insider on the condition of anonymity, worried that the interview may hurt her job prospects in the “extremely conservative area” she lives in.

She graduated from Purdue University last year with a bachelor’s degree in management after eight years of part-time study and full-time work.

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