Financial hacks for millennials: Student debt
At 72 million strong, millennials are the largest age group in American history.1 And they are facing a world of great financial uncertainty and opportunity.
More educated than previous generations, one-third of millennials have at least a college degree2 and the average student loan debt for a 2020 graduate was just over $29,927.3 That figure is important. Gallup research found that when a student’s debt load reached $25,000, they began to see it less as an “acceptable investment” and more as a “source of existential dread.”4 That deep level of stress can rob young adults of the joy and excitement they should have starting out in life.
Here are some financial hacks that can help millennials get out from under student debt:
Hit up your employer
Student loan repayment assistance is becoming a workplace perk. More and more employers see it as a way to build loyalty and increase the morale and productivity of young talent.
Refinance to reduce
Student loan refinancing may help you lower your interest rate, gain better repayment terms and consolidate your monthly payment. But proceed with caution. You may risk losing certain protections around loan discharge due to death or disability. You may also lose access to certain income-driven repayment options or potential loan forgiveness programs.5
Move to Niagara Falls
Or Detroit. Or Chattanooga. To attract younger talent, some U.S. cities are putting money on the line. The Rural Opportunity Zones program in Kansas, for example, is luring college graduates to smaller communities with the promise of up to $15,000 in student loan repayments.6
Show yourself tough love
Many millennials climb out of debt through strict budgeting. Cutting out expensive extras, getting a roommate, shopping for clothes at thrift stores (or not shopping at all), selling your car are all ways cut back on expenses and pay back your loans sooner.
See if your employer can channel part of your paycheck into a “loan payback” account. The money is out of sight, out of mind—until you’re ready to pay off a chunk of your debt. And keep saving for your future as well, says James. “Make debt repayment a priority but also be sure to set aside money for changing life needs, such as buying a home, having children, and retiring.”
Pick up a part-time gig
Millennials are hard workers. Almost three-quarters work more than 40 hours a week, and 26 percent have more than one job.7 Side-job opportunities in the “gig economy” are on the rise, from Uber-driving to Task Rabbiting.
Research tells us that working Americans who are most confident, financially and emotionally, put a high priority on living within their means, sticking with a plan and deferring gratification. It’s a recipe for success for those who want to pull themselves out of student debt, as well.
2022-140592 Exp. 07/2024