Douglas Olsen
Millennials are the generation that has taken on the most student debt, with an average balance of $40,614. This has been one of their key financial obstacles, and it has contributed to a sense of financial unease among millennials. While college degree holders tend to be better off financially, more than half of older millennials with student debt say their loans weren't worth it, and many are still paying them off a decade later. However, millennials have been reducing their student loan debt at a compound annual rate of 4.40%, the largest reduction of any generation in the 2020s.
| Characteristics | Values |
|---|---|
| Average student loan debt for millennials | $40,614 |
| Average outstanding student loan balance among millennials | $40,438, down from $46,281 in 2021 |
| Average student loan debt balance reduction | 4.40% compound annual reduction |
| Percentage of millennial student borrowers with loan payments less than $200 | 47% |
| Average student loan debt for older Gen Zers | Between $20,000 and $40,000 |
| Percentage of older millennials aged 36 to 41 with a student debt balance of $20,000 or less | 43.5% |
| Percentage of older millennials who have completely paid off their student loans | 32% |
| Average amount borrowed by older millennials in student loans | $21,880 |
| Average net worth of an American millennial | $128,000 |
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What You'll Learn
Millennial student loan debt averages $40,614
Millennials have been dubbed the "student debt generation", with the average millennial with student debt owing $40,614. This is 6.99% higher than the nationwide average. Millennial student borrowers who were 20 to 25 in 2006 had an average balance of $12,665 in student loan debt ($18,496 in 2022 dollars). As of June 2022, 43.5% of older millennials aged 36 to 41 had a student debt balance of $20,000 or less.
While college degree holders generally enjoy improved job security, longer life expectancies, higher earnings, and greater financial stability, more than half (52%) of older millennials with student debt say their loans weren't worth it. A CNBC Make It survey of 1,000 US adults ages 33 to 40 found that only 32% of those who took out loans have paid them off entirely, meaning 68% of older millennials are still paying down their student debt more than ten years later.
Despite this, the average American millennial is better off financially than they were five years ago, with higher salaries allowing many to grow their wealth and buy homes. However, under the weight of student debt and childcare, they may still be worse off than previous generations. Student loan debt is a national crisis, with millions of Americans struggling to fit loan payments into their monthly budgets.
Millennials have reduced their average student loan debt balance by a larger percentile (4.40% compound annual reduction) than any other generation in the 2020s. Among student borrowers with outstanding loans, Gen Z and Millennials are most likely to make payments of less than $200 (64% and 47% respectively). Those with federal student debt could be set to have up to $20,000 of their debt canceled as part of a Biden administration plan.
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47% pay under $200 monthly
As of 2024, 47% of millennial student borrowers have loan payments of less than $200. This is a larger percentage than any other generation, with Gen Z being the closest at 64%. The average outstanding student loan balance among millennials is $40,438, down from $46,281 in 2021. The average student loan debt balance among millennials declines at a compound annual rate of 4.40%.
While the cost of college has been one of the key financial obstacles for millennials, those with federal student debt could be set to have up to $20,000 of their debt canceled as part of a Biden administration plan. However, the debt-relief proposal is currently paused due to legal challenges. Millennials owe the largest share of student loans out of all generations, with 3.87 million millennials owing between $20,000 and $40,000.
Despite the high levels of student debt, the average American millennial is better off financially than they were five years ago. Higher salaries have allowed many to grow their wealth and buy homes. However, under the weight of student debt and childcare, they may still be worse off than prior generations. As of June 2022, 43.5% of older millennials aged 36 to 41 had a student debt balance of $20,000 or less, while the average millennial with student debt had a balance of $40,614.
A survey of 1,000 U.S. adults ages 33 to 40 found that just 32% of those who took out loans have entirely paid them off, meaning that 68% of older millennials are still paying down their student debt a decade later. More than half (52%) of older millennials with student debt say their loans weren't worth it. Student loan debt is a national crisis that affects millions of Americans, and borrowers are exploring income-driven repayment, forbearance, and public service loan forgiveness programs to address payment affordability.
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32% have paid off their loans
Student debt has been a significant issue for millennials, with the generation facing stagnant wages, rising living costs, and high education fees. As of 2021, 32% of older millennials aged 33 to 40 had entirely paid off their student loans, leaving 68% still paying off their debts. The average loan balance for millennials was $40,614, with 47% of borrowers making payments of less than $200 per month. This has decreased from $46,281 in 2021, with a 4.40% compound annual reduction rate, the largest reduction of any generation. Despite this, millennials still have an average student loan debt balance 6.99% higher than the national average, with the average millennial owing $2,641 more than the average indebted student borrower.
The financial burden of student debt has had a significant impact on the lives of millennials, with many expressing regret about taking out loans. More than half of older millennials with student debt feel that their loans were not worth it, citing the constant struggle of paying off their debts and the lack of financial security. The high cost of college has been a key financial obstacle for this generation, and it has resulted in millennials becoming the student debt generation.
While college degree holders generally have improved job security, longer life expectancies, and higher earnings, the financial burden of student loans has offset some of these benefits for millennials. The generation faced additional challenges, such as the 2008 financial crisis, which resulted in funding cuts and slow wage growth. As a result, many millennials have advocated for student debt relief and loan forgiveness programs.
Despite the challenges, there are some positive signs for millennials regarding their financial situation. As of 2023, the average American millennial is better off financially than they were five years ago, with higher salaries allowing them to grow their wealth and purchase homes. Additionally, federal student debt relief proposals, such as the Biden administration's plan to cancel up to $20,000 in debt, could provide much-needed support. However, as of 2024, the national student debt load continues to increase, and many Americans struggle to fit student loan payments into their monthly budgets.
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The Biden administration proposed debt cancellation
Student loan debt has been a significant issue for millennials, with almost half of this generation burdened by student debt. The average debt for this generation stands at around $40,000, with a higher average balance than any other generation.
The Biden administration has proposed and implemented various measures to address this issue, including the SAVE (Saving on a Valuable Education) repayment plan. This plan provides debt forgiveness to borrowers who have been repaying their loans for at least 10 years and took out $12,000 or less in student loans. The administration has approved nearly $138 billion in student debt cancellation for almost 3.9 million borrowers through executive actions.
Additionally, the Biden-Harris Administration has cancelled student loan debt for nearly 800,000 public service workers and over 930,000 borrowers who had been repaying their loans for over 20 years without relief. The Department of Education has also proposed cancelling student debt for borrowers facing financial hardship and those who owe more than they initially borrowed.
The Biden administration's efforts have faced opposition from Republicans in Congress, who argue that the cost of cancellation is shouldered by taxpayers. Despite this resistance, the administration has continued to prioritize student debt relief, with President Biden stating that his administration has taken "historic action to reduce the burden of student debt".
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Student loan debt is a national crisis
As of 2024, the average outstanding student loan balance among millennials is $40,438, down from $46,281 in 2021. This represents a 4.40% compound annual reduction, the largest decrease among all generations. However, the average millennial with student debt still owes $2,641 more than the average indebted student borrower. Additionally, only 32% of older millennials have fully paid off their student loans, with the majority still paying down their debt more than a decade later.
The high cost of college has led to millennials becoming the student debt generation. Older millennials entered adulthood around the time of the 2008 financial crisis, which was followed by funding cuts, rising college costs, and slow wage growth. As a result, many millennials had to take out substantial loans to finance their education, with the average loan amount being $21,880. This has contributed to a national student debt crisis, with student loan debt being the second-highest consumer debt category, surpassed only by mortgage debt.
To address this crisis, there have been proposals for debt-relief plans, such as the Biden administration's plan to cancel up to $20,000 of federal student debt for borrowers. However, the implementation of such plans has been met with legal challenges, highlighting the complexity of the issue. Additionally, some individuals advocate for targeting the root cause of the problem by addressing the high cost of college and preventing government subsidization.
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Frequently asked questions
The average student debt for millennials is $40,614, with 43.5% of older millennials aged 36 to 41 having a debt balance of $20,000 or less.
Millennials owe the largest share of student loans out of all generations, with 3.87 million millennials owing between $20,000 and $40,000.
Millennials have reduced their average student loan debt by 4.40% annually, a larger percentile than any other generation in the 2020s. However, only 32% of older millennials have entirely paid off their student loans.
The 2008 financial crisis, rising college costs, and slow wage growth have all contributed to the student debt crisis among millennials.
There have been proposals for student debt cancellation and loan forgiveness programs, but many Americans continue to struggle with fitting student loan payments into their monthly budgets.
