When he first heard about President Joe Biden’s plan to write off student loan debt for millions of federal borrowers, Travis Rapoza was cautiously optimistic.
A Pell Grant recipient, Rapoza is eligible for $20,000 in loan forgiveness under the plan Biden unveiled in August. Coupled with the money he has saved from living with his parents for the past four years, he would finally be debt-free and able to move on his own.
Finally, Rapoza thought, his generation was being heard by leaders in Washington D.C. Finally, something was being done to address the financial anxiety and hardship many millennials face.
He should have known better, he says Fortune. The excitement felt by many federal borrowers was short-lived as Biden’s pardon plan was put on hold due to multiple legal challenges from conservative and libertarian groups. His fate now rests with the United States Supreme Court.
“I was ecstatic, who wouldn’t be?” said Rapoza, 31, when he learned of Biden’s debt cancellation plan. “But why would we have a beautiful thing? I don’t think we’re expecting anything.”
Low expectations come with the territory when you’re a millennial. The generation, which includes people born between 1981 and 1996, has faced one financial setback after another. They have been hit hard by not one but two global crises – the Great Recession and the COVID-19 pandemic – so-called “black swan” events that typically occur once in a generation. These events had a disproportionate impact on their financial lives: They buy houses later (if they can afford it), postpone marriage and hesitate about children. They work harder than their parents while being told that they are lazy and selfish.
Many, like Rapoza, feel like they were pressured into expensive colleges by mom and dad, who told them higher education was the key to a better life. But despite being better educated than their parents’ generations, that education has been accompanied by much higher student indebtedness, as tuition fees have soared.
“The possibility of student loan relief hanging in front of them, to potentially be ripped off, is the latest in a long line of issues,” said Jonathan McCollum, president of federal government relations at the law firm new -Yorkers Davidoff Hutcher & Citron. .
Median salaries are still higher for college graduates than for non-graduates and those not attending, but they haven’t kept pace with the cost of living. In addition to record home prices, many young adults today also owe hundreds (if not thousands) each month on their student loans.
“What’s really frustrating is when I hear baby boomers say, ‘Well, I paid off my student loans, why don’t you? “Not to mention the fact that the price of university education has more than tripled in 30 years,” says André Perry, senior researcher at the Brookings Institution. “It’s frustrating when you have a group of individuals doing whatever they’re asked to do to get a degree so they can support a knowledge economy, and yet they have to bear a greater proportion of the costs than their predecessors.”
Too good to be true
When it was announced, Biden’s student loan relief plan offered a ray of hope for those feeling trapped in debt. Instead, millennials can add it to the list of promises that turned into disappointments big and small, from affordable housing to trying to win a ticket to a Taylor Swift concert.
Take housing. When federal student loan repayments were halted during the COVID-19 pandemic, some millennials were finally financially stable enough to buy homes, despite record prices across the country. Mortgage rates hit record lows, giving first-time homebuyers a brief window in which their money could go further. With a little extra money to save each month, millennials had the chance to dream about how they would spend if their debt wasn’t a factor. Rapoza and other young adults say that if loan forgiveness continues, they will finally be able to save for a home.
Then, mortgage rates have soared this year, coupled with house prices that have continued to reach record highs, once again excluding many first-time home buyers.
Millennials can’t even take a break from their free time. When they have enough disposable income to buy something fun like concert tickets, they still run into walls erected by past generations. Earlier this month, millions of people tried to log on to Ticketmaster to score seats for Taylor Swift’s massive US tour, and millions failed. Would it have been easier if Ticketmaster wasn’t owned by LiveNation, a merger that many Democrats, including quintessential millennial politician Rep. Alexandria Ocasio-Cortez, now call a monopoly? Impossible to say, but the experience is emblematic of how millennials consistently end up with the end of the stick: massive debt, low wages, high cost of living and a number of boomer policies preventing them from succeeding and growing. happiness.
“It seems we’ve been impacted by everything,” says Ja’Net Adams, a 41-year-old who paid off $50,000 in student debt and now helps others manage their personal finances. “It all ties together for millennials and affects their whole financial situation.”
Each setback makes the next one worse. Millennials took out student loans to go to a good school in hopes of landing a good job. But debt prevents many from being able to buy a home, save money or start investing. Given all of this, they have less wealth than baby boomers at the same age.
Soon they will be caring for their aging parents en masse, which will add even more financial pressure. The issues are magnified for blacks and other non-white millennials.
“It’s almost like we don’t want millennials to get a piece of the American dream,” Perry says.
Thus, Generation Y could enjoy a victory. But Rapoza says that victory seems unlikely to come in the form of a student loan forgiveness, given that Biden is asking the US Supreme Court – currently made up of six conservative justices and three liberals – to rule on the legality of the program.
“If you’re going to play baseball and it’s raining, I wouldn’t expect a good game,” he said.
Still, Rapoza and Perry say the government must do something to help its citizens. And saying “don’t go to university” is not a solution; America needs an educated workforce to be competitive, they say.
Instead of just putting up roadblocks to prevent the cancellation of student loans and other Democratic policies, they would like to see Republicans presenting solutions to America’s higher education cost crisis. Rapoza does not give up hope that something can be done to help his generation and future generations.
“We were sold this myth and it didn’t work and we stuck with the bag,” Rapoza says. “Can someone give us a hand?” Can’t you see how touched we are? »
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