Millennial Debt: A Major Problem For All Americans

ByChristina Postolowski

As U.S. student loan debt has grown to nearly $1 trillion, the number of young borrowers falling behind on their payments is also on the rise. According to a new report by the New York Fed, 35% of borrowers under age 30 — an astonishing 5 million millennials — are “seriously delinquent” on their student loan payments. While a college education still pays, skyrocketing debt and delinquency could harm this generation — and the economy.

For borrowers, falling delinquent or defaulting on student loan payments can have serious, long-term consequences. Delinquent loans damage your credit rating, which can impact your ability to buy a car, rent an apartment, or even get a job. Default has even more serious consequences: additional fees, withholding of tax refunds, wage garnishment, and sometimes legal action.

For everyone else, the growing delinquency rate could mean a slower economic recovery. For example, studies suggest that individuals with loans are less likely to start a business or buy a home. As the Great Recession highlighted, the housing market has a huge impact on our economy as a whole. If fewer young adults are able to buy a home or qualify for a mortgage because of their student loan debt, the housing market — and economy recovery — will suffer.

We know that we need to do much more to make college affordable again, but there’s also a lot we need to do to help struggling borrowers who already hold that debt. Last fall, Young Invincibles released a report titled The Student Perspective on Federal Financial Aid Reform that found students need better repayment information and counseling. There are several different repayment options that can help borrowers struggling to pay back their loans before they become delinquent. Unfortunately, few students know about or use these options. For private borrowers, the Consumer Financial Protection Bureau is looking into ways to help struggling borrowers get into more affordable repayment plans that lenders often refuse to offer.

To learn more about how to manage your loans and to join the fight to stem the rising default rate, visit