A government report indicates that almost a third of adults in the country are barely making it from paycheck to paycheck. Despite unemployment being at its lowest rate since the 2007 recession, 31 percent of Americans (76 million people) still struggle financially — due in large part to the burden of student loan debt.
The report on the economic well-being from the Federal Reserve Board is the government’s annual review of the economic status of American consumers. Established in 2013 and conducted each fall, the Fed report is based on the Survey of Household Economics and Decision making.. Topics in the SHED include economic preparedness, access to banking and credit, vehicle purchases, decisions about housing, income and savings behaviors, education and student loans, and savings for retirement.
More than 50 percent of adults under 30 years of age who attended college acquired some debt while in college. According to the Fed report, 21 percent of those who incurred student loan debt to attend a for-profit institution are behind on their payments. Conversely, only 7 percent and 5 percent who borrowed to finance studies at a public or not-for-profit institution, respectively, are late on their payments.
Educational debt for all millennials is not only a result of student loans. The survey found that 21 percent who have education-related debt owe money on credit cards related to their studies. The median credit card balance is $3,000.
Another concern shown in the Fed survey data is that half the country would struggle financially to handle an unexpected car repair or plumbing problem, as emergency savings is nonexistent for many adults.
Forty-six percent of respondents indicated that they either could not cover a $400 emergency expense without selling something, borrowing money, or charging it, according to Forbes. Twenty-two percent of respondents incurred an unexpected, major medical expenditure the previous year that had to be paid out of pocket, and almost 46 percent of them still owe money from that expense. Additionally, 22 percent of those respondents who are employed reported that they are either working multiple jobs or earning money from side gigs.
However, the report wasn’t all bleak. The percentage of Americans struggling financially is falling. According to CNN Money, 38 percent of Americans were struggling financially in 2013, 7 percent higher than today.
