Worth more than the value of Facebook and Microsoft combined, the student loan bubble in America has reached $1.4 trillion – and it’s about to pop.
Joseph Hogue, CFA and writer for PeerFinance101 described a millennial’s life after debt and its financial impacts on the economy at large. “Millennials have been scared off debt, and for good reason. But it also means less spending to keep money moving around and the economy going.” Forced to allot a huge portion paychecks towards paying off student loans, about $400 a month, millennials are spending less on discretionary purchases as they struggle to even afford necessities. From 2008 compared to today, spending among 18-34 year olds is down almost $20 per day; in the long run, this hurts the economy, small businesses, and stifles entrepreneurship.
Creating solutions for the student loan crisis will do more than save graduates a few thousand dollars – it could prevent another economic crash. Take a look at this infographic for more detail on the growing student loan concern, how graduates are coping, and what we can do to overcome the consequences together.