When he first heard about President Joe Biden’s plan to relieve the student loan debt of millions of federal borrowers, Travis Rapoza was cautiously optimistic.
A Pell Grant recipient, Rapoza is eligible for $20,000 in loan forgiveness under the plan Biden unveiled in August. Along with the money he has saved while living with his parents for the past four years, he will finally be debt free and able to move out on his own.
Finally, Rapoza thought, his generation was being heard by the leaders in Washington. Something was finally being done to address the financial anxiety and hardships many millennials face.
He should have known better, he says Condition. The excitement felt by many federal borrowers was short-lived as Biden’s forgiveness plan was stalled by multiple legal challenges from conservative and libertarian groups. His fate now rests with the US Supreme Court.
“I was ecstatic, who wouldn’t be?” Rapoza, 31, says of learning about Biden’s debt relief plan. “But why get a nice thing? I don’t think we expect anything.”
Low expectations come with the territory when you’re a millennial. The generation that includes those born between 1981 and 1996 has faced one financial setback after another. They have been hit hard by not one but two global crises – the Great Recession and the COVID-19 pandemic – so-called “Black Swan” events that typically happen once in a generation. These events had a huge impact on their financial lives: They buy houses later (if they can afford them at all), put off marriage, and fight for children. They work harder than their parents while being told over and over that they are lazy and selfish.
Many, like Rapoza, feel like they were pushed into expensive colleges by a mom and dad who told them a college education was the ticket to a better life. But even though they are more educated than their parents’ generations, that education comes with a significantly greater load of student loan debt as college costs have soared.
“The possibility of student loan relief being dangled in front of them, only to potentially be snatched away, is the latest in a long line of problems,” said Jonathan McCollum, chairman of federal government relations at the New York law firm Davidoff Hutcher & Citron.
Average wages are still higher for college graduates than for non-graduates and those who don’t attend, but they haven’t kept up with the cost of living. In addition to record home prices, many of today’s young adults also owe hundreds (if not thousands) each month on their student loans.
“What’s really frustrating is when I hear baby boomers say, ‘Well I paid off my student loans, why can’t you?'” Without considering the reality that the cost of college tuition has increased more of three times in 30 years,” said Andre Perry, a senior fellow at the Brookings Institution. “It’s disappointing when you have a group of people who are doing everything they want to get a degree so they can support a knowledge economy, and yet they have to shoulder a larger share of the cost than their predecessors.”
Too good to be true
When it was announced, Biden’s plan for student loan relief offered a glimmer of hope for those who feel trapped by their debt. Instead, millennials can add it to the list of promises that have turned into disappointments big and small, from affordable housing to trying to score a ticket to a Taylor Swift concert.
Get a home. When federal student loan repayments were suspended during the COVID-19 pandemic, some millennials were finally financially stable enough to buy homes despite record high prices across the country. Mortgage rates were at record lows, giving first-time buyers a short window when their money could go further. With a little extra money to save each month, millennials have a chance to dream about how they would spend if debt wasn’t a factor. Rapoza and other young adults say if loan forgiveness continues, they will finally be able to save for a home.
Mortgage rates then rose this year, coupled with continued record high home prices, once again excluding many first-time home buyers.
Millennials can’t even catch a break in their free time. When they have enough disposable income to spend on something fun like concert tickets, they still run into walls erected by past generations. Earlier this month, millions tried to log into Ticketmaster to win seats for Taylor Swift’s massive US tour – and millions failed. Would the process have been easier if Ticketmaster hadn’t been owned by LiveNation, a merger that many Democrats, including quintessential millennial politician Rep. Alexandria Ocasio-Cortez, now call a monopoly? It’s impossible to say, but the experience is emblematic of how millennials are consistently left with the short end of the stick: massive debt, low pay, high costs of living, and a range of boomer policies that prevent them from achieving success and happiness.
“It seems like we’ve been hit by everything,” said Ja’Net Adams, 41, who paid off $50,000 in student loan debt and now helps others manage their personal finances. “It all ties together for millennials and affects their whole financial picture.”
Each delay complicates the next one. Millennials took out student loans to go to a good school in hopes of landing a good job. But debt prevents many from being able to buy a house, save or start investing. All that being said, they have less wealth than baby boomers of the same age.
Soon, they will be caring for their aging parents en masse, adding even more financial strain. The problems are compounded for black and other non-white millennials.
“It’s almost like we don’t want millennials to get a piece of the American dream,” Perry says.
So Gen Y could use a win. But Rapoza says the win seems unlikely to come in the form of student loan forgiveness, given that Biden is asking the U.S. Supreme Court — currently composed of six conservative justices and three liberals — to rule on the program’s legality .
“If you’re going to play baseball and it’s raining, I wouldn’t expect a good game,” he says.
Still, both Rapoza and Perry say the government needs to do something to help its citizens. And saying “don’t go to college” isn’t a solution; America needs an educated workforce to be competitive, they say.
Instead of just creating roadblocks to stop student loan forgiveness and other Democratic policies, they’d like to see Republicans present some solutions to America’s higher education cost crisis. Rapoza is not giving up hope that something can be done to help his and future generations.
“We were sold this myth and it didn’t pan out and we were left holding the bag,” says Rapoza. “Can someone help us? Can’t you see how badly we’ve been hit?’
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