How do generations compare when it comes to student loan?

0
31

[ad_1]

aldomurillo / Getty Images

aldomurillo / Getty Images

Americans have large student loan accounts. According to the Federal Reserve, as of the first quarter of 2021, the total outstanding student loan debt is about $ 1.74 trillion. While this is a large number, it does not provide any indication of how each generation bears the brunt. Although different student loan forgiveness offers were produced, no significant relief has yet occurred.

Read: These elite colleges went virtual but still raised tuition fees
Learn more: The most and least educated cities in America

College tuition fees are rising much faster than inflation, but as we find out, the younger generation doesn’t necessarily have more student debt. In fact, there is much more nuance: student loans affect different generations in different ways. In fact, the second largest annual increase came from baby boomers after Gen Z. Since most Gen Z are still in college, a big increase is to be expected, but other generations could continue to grow if they pay for their children’s education.

Read: The Economy and Your Money: Everything You Need to Know

Let’s take a closer look at how student loan debt affects each generation, as well as how rapidly student loan debt is growing for each generation.

Last updated: 20 Aug 2021

monkeybusinessimages / Getty Images / iStockphoto

monkeybusinessimages / Getty Images / iStockphoto

Generation Z (18-23)

  • Average student debt in 2019: USD 12,495

  • Average student debt in 2020: USD 17,338

  • Annual change: 39%

The youngest generation with student debt, Generation Z, has the lowest outstanding balance as of 2020. Given that this generation fully embraces the typical 18 to 22 age range that Bachelor is attending, it makes sense that they have the least student debt. In 2019, they averaged just $ 12,495 in student debt. As such, it will be interesting to see how student debt is formed for Gen Z, especially when they graduate from college and take on the full amount of student debt they need to attend college.

See: How the pandemic has affected the financial situation of every generation

Nature / Getty Images / iStockphoto

Nature / Getty Images / iStockphoto

Millennials (24-39)

  • Average student debt in 2019: USD 34,795

  • Average student debt in 2020: USD 38,877

  • Annual change: 12%

Millennials between the ages of 24 and 39 had an average student debt of $ 38,877 in 2020. While their student debt grew much more slowly than Gen Z’s, it continued to rise despite the fact that many millennials are no longer in college. Millennials also have twice as much student debt as Gen Z, meaning their total balances are still increasing significantly. Indeed, the millennial balance sheet increased by just over $ 4,000, compared to just under $ 5,000 for Gen Z. And this despite the fact that the percentage change in Gen Z was more than three times that of the Millennial generation.

Study: The surprising reasons Gen Z and millennials are financially on different worlds

svetikd / Getty Images

svetikd / Getty Images

Generation X (40-55)

  • Average student debt in 2019: USD 39,981

  • Average student debt in 2020: $ 45,095

  • Annual change: 13%

Although Gen X is one of the country’s highest loan recipients, its student loan debt continues to rise. Of course, this speaks more about student loans in general than about Generation X. After all, all age groups have seen their student loans continue to rise. However, Gen X saw the second-largest increase in dollar value since last year, at $ 5,114. Its percentage change was 13%. Its average student debt is $ 45,095, the highest average for all age groups in 2020.

Verify: What Generation X Can Learn From Boomer Money Mistakes

fizkes / Getty Images / iStockphoto

fizkes / Getty Images / iStockphoto

Baby Boomers (56-74)

  • Average student debt in 2019: USD 34,957

  • Average student debt in 2020: USD 40,512

  • Annual change: 16%

Baby Boomers are an interesting case when it comes to outstanding student loans. Their outstanding student loans in 2019 were almost the same as those of millennials in 2019, despite a significant age difference. In 2020, the average student debt of baby boomers is nearly $ 2,000 more than millennials of $ 40,512. They also had a higher percentage change of 16%, second only to the percentage change for Gen Z. These numbers are not very encouraging, especially given that many baby boomers have already retired.

More: Baby Boomers, Generation X, or Millennials – Who Really Worse Financially?

kate_sept2004 / Getty Images / iStockphoto

kate_sept2004 / Getty Images / iStockphoto

Silent Generation (75+)

  • Average student debt in 2019: USD 25,614

  • Average student debt in 2020: USD 28,052

  • Annual change: ten%

The silent generation aged 75 and over had the second largest outstanding student debt in 2020 at $ 28,052. Generation Z is the only generation with less outstanding debt, although there is still a large gap between the two. Although the silent generation has less student debt than some of the younger generation, its debt has increased, albeit at a lower percentage. In fact, the silent generation had the lowest percentage change of all generations at 10%. This led them to enter 2020 with $ 2,438 more student debt than the 2019 average.

More From GOBankingRates

Methodology: For this story, GOBankingRates used the most recent Experian student loan debt data by generation, published in February 2021. All data has been collected and is current as of May 4, 2021.

This article first appeared on GOBankingRates.com: How do generations compare when it comes to student loan?

[ad_2]

Source link