As the three-year student loan pause is coming to an end, millions of Americans will soon need to start repaying their student loans. However, since the student loan moratorium’s implementation in March 2020, a few notable observations have been revealed.
Many U.S. citizens agree that taxpayers should not be burdened by the financial choices of others as the government fails to address the transfer of wealth from young individuals to educational institutions. In other words, pursuing higher education is diminishing the wealth of Millennials and Gen Z.
Roth: College is making Millennials and Gen Z less wealthy https://t.co/4K0bi9MgLV
— TheBlaze (@theblaze) July 5, 2023
Research shows that Millennials’ median income at age 40 is 21% higher than the Boomers’ and over 10% higher than Gen X’s, adjusted for inflation. However, Millennials significantly lag behind in wealth accumulation, owning only a 5% share compared to Baby Boomers’ 21% at the same age.
The exorbitant cost of college and the massive debt burden hinder wealth accumulation. Millennials aged 25 to 34 hold around half a trillion dollars in college loan debt, while the 35-to-49 age group holds $636.2 billion. College degrees have become a financial scam, with the government as the largest predatory lender.
Young individuals assume substantial debt without an adequate return on investment. The government’s involvement in college lending has driven costs significantly higher, benefiting colleges and burdening students. This exploitative structure restricts economic freedom and wealth creation.
Individuals fail to consider their future objectives when choosing their education paths. The transfer of wealth from young people to colleges impedes asset accumulation, leaving them with liabilities and debts. Debt associated with college education weakens individuals’ financial positions and delays wealth accumulation.
The wage gap between college-educated and non-college-educated individuals has been narrowing. To address this issue, students should receive comprehensive information about expected returns on investment based on their major and school.
Colleges should share responsibility in the underwriting process or face legal action if graduates can’t leverage their degrees. Colleges already receive substantial taxpayer money, so they should provide worthwhile degrees. Government involvement in student lending should be eliminated to empower young individuals to build wealth independently.
Escalating college costs, burdensome student loan debt, and limited returns on investment harm Millennials, Gen Z, and ultimately future generations. Transparency, shared responsibility, eliminating government involvement, and empowering young individuals to focus on building wealth is crucial for economic prosperity and financial freedom.