The Wall Street Journal reported 2-in-3 millennials has at least one source of long-term debt–defined as an amount owed for a period of time exceeding 12 months–whether it be in the form of student loans, car payments, or a home mortgage. That number is even higher for college-educated millennials, an astonishing 81 percent of whom are in long-term debt.
The Wall Street Journal used data from the 2012 National Financial Capability Study which looked at both the short-term financial management and long-term financial planning of young Americans ages 23-35.
Unsurprisingly, student loans were the number one source of long-term debt. More than half of millennials with student loans worried about their ability to pay them off, even those who were several years out of college and earning decent salaries.
Although those with low incomes obviously reported more concern about paying back their student debt, 34 percent of millennials with annual incomes above $75,000 doubted they would be able to repay their student loans.
The data showed the struggle continued beyond the 20-something years. Over half of those over the age of 30 with student loans said they were still worried about repayment.
Millennials not only struggle with long-term debt; the data found a sizable share carried short-term debt as well. Over half of millennial credit card users reported carrying over a balance, for which they were charged interest, in the past year.
The data also found that 2-in-5 millennials used alternative financial services, such as auto title loans, payday loans, pawnshops, rent-to-own loans, and tax-refund advances at least once in recent years.
Many news outlets like to blame millennials’ debt problem on a lack of financial literacy, but with the rising cost of education and student loan debt, as well as high rates of youth unemployment and underemployment, there are certainly other factors at play.
