Column: Student loans a major issue

Millennials are a generation that fascinates the business community. Numerous articles have been written about cord-cutting, ride-sharing and the sharing culture in general that seems to be "so hip these days." Some of these articles even offer explanations as to why we do such activities. The short answer is that we consume media in a different way. 

The longer answer is that many millennials simply could not afford the expense even if they wanted traditional cable packages. Student debt from tuition costs is high and will only get higher in the coming years. This reality, while causing shifts in behavior, is underestimated in its potential effects to the macro environment.

More people are going to college now than a decade ago. 40 percent of people aged 18-24 were attending college in 2014 and, of those students, the ones who will graduate will face nearly $21,000 of debt by age 25, on average. Average annual tuition fees are around $31,000 for a non-profit, private university, while public universities average at about $9,200 per year. This number is set to rise as well. Tuition rates have historically risen six percent above the inflation rate which will drive these debt numbers for college students even higher.

The student debt bubble hangs over an entire generation. We acknowledge its existence, but we do not appreciate the danger that it represents. Higher tuition costs, followed by student loans, are causing a debt spiral that has an uncertain end. College graduates may face the possibility of defaulting on their loans if they cannot repay them in time. If college rates continue to rise as they have, this may become a commonplace occurrence. A critical mass of defaulting student loans would trigger a recession and put a decade’s worth of people into crisis.

Millennials have become a case study in generational economics and social trends. They are a group that is a favorite topic for business and psychology classes alike. Whether or not you agree with the stereotypes of each generation, ours has been one of the most studied in recent times. Let’s hope that we don’t get studied in future history classes as the "Defaulting Generation."

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