GenZ Face Mounting Inequality due to Student Loan Debt
The GenZ Mental Health crisis has economic reasons and debt is the main culprit.
GenZ are the generation that in 2022, are between 11 and 26 years of age. However as they graduate, they face an uphill battle. It’s not just due to Covid-19, or political unrest or the necessity of remote learning.
More than 45 million Americans collectively owe over $1.7 trillion in student debt.
Since student loans are the cost of tuition are mounting each year, this means GenZ will bear the biggest burden ever for their privilege of a college education.
Capitalism is Asking Young people To Delay Life
I wanted to share some of the numbers of a recent survey. Invest in You Student Loan Survey conducted by Momentive finds that 81% of people with student loans say they’ve had to delay one or more key life milestones because of their debt. Momentive surveyed 5,162 American adults between Jan 10 and Jan 13 online to better understand the impact of student debt.
The survey found that among student loan borrowers, 42% delay paying off other loans, 40% delay investing money, 38% delay saving for retirement, 35% delay travel, 33% delay buying a home, 16% delay having a baby, 14% delay getting married and 12% delay finding a new job.
You can clearly see how student loan debt could snowball to ruin one’s life:
42% delay paying off other loans
40% delay investing money
33% delay buying a home
14% delay getting married
GenZ will literally be the most lonely generation of all-time due to this mechanism of Capitalism that penalizes our youngest members of society. Even graduating in the Great Resignation won’t save them.
As of 2018 Members of Gen Z already owed an average of $4,343 of student loans, by 2022 I’m sure it’s quite a lot more than that.
What’s more troubling about College education in the U.S. is how many older folk say it was a scam. More than half of older millennials with student debt say their loans weren’t worth it.
America’s young adults don’t have robust savings and some were caught by the Buy Now Pay Later (BNPL) movement during the pandemic in 2021.
So goes the enticing nature of buy now, pay later (BNPL), the payment method that allows consumers to pay for their purchases in installments, largely without interest. But the multi-billion-dollar trend has government officials – and even some consumers – worried. They (GenZ) are vulnerable to bouts of retail therapy that they ultimately cannot afford.
Having such high student debt loans normalizes debt culture. For GenZ owing money even with high-interest credit card debt is just normal. Ultimately that’s less money they will ever have to invest, or buy real-estate, which are two of the main ways the Middle Class can maintain their lifestyle, even in hard times or if God forbid, a recession occured.
In 2021, from an Experian Consumer debt study it was found that GenZ had a lot of debt, here is their breakdown:
Gen Zers who hold each type of debt.
Average credit card debt: $1,963
Average student loan debt: $17,338
Average auto loan debt: $15,574
Average personal loan debt: $6,004
During the Great Reshuffle of 2020 to 2023 GenZ were already known as job hoppers but they lead the way. The Covid-19 pandemic triggered a country-wide quitting spree — and new data suggests that even more Americans are planning to switch jobs soon, with Generation Z and millennials leading the wave.
The restlessness of working from home and a booming job market have spurred millions of workers to leave their employer in a mass exodus dubbed “The Great Resignation.” The fact that GenZ face the highest student loans and total household debt generally means they are the ones most likely to move geographically to better places, or to hope for better jobs with better life-work balance.
Younger adults, who faced bleak job prospects and disproportionate job loss throughout the pandemic, were and are especially craving a change. Many members of GenZ are more vulnerable to mental health issues, and it is largely financial.
Many of them are doomed to have vastly different lives from their Grandparents or even their parents. Student loan debt prevents family formation, it prevents people from making decisions about their life, about purchasing a home, about buying their first car, about getting married, about having children. The new normal isn’t post Covid-19 endemic life, it’s being a GenZ in a world where Capitalism is working against them.
For GenZ, if education has been the arbiter of economic mobility and economic freedom, debt is the new servitude to an economic and democratic system that no longer really work for them or their futures.