It is no secret that student loan debt in the United States is reaching critically dangerous levels. Currently, Americans owe more than $1.2 trillion in student loan debt. Compare that to the $712 billion in credit card debt owed by Americans, and it becomes clear that student loans pose a unique threat to the national economy. And as bad as the student debt crisis is, it can and likely will get worse. In fact, student loan debt grows by nearly $3,000 every second — you can watch it grow in real-time here.
It is also no secret that millennials are the hardest hit by student loan debt. A bachelor’s degree has basically become the new high school diploma and skyrocketing tuition (ironically due in no small part to the availability of federal student loans) in conjunction with stagnant wages has created a perfect storm for the millennial generation.
Given the dire situation, millennials are desperate for any available relief from the rising tide of student debt which averages over $35,000 for a bachelor’s degree. One small form of assistance for student loan borrowers comes in the form of a tax deduction for student loan interest: borrowers are able to claim a tax deduction for interest paid on student loans up to $2,500. This may not be a huge sum of money, but every little bit helps as millennials try to tackle their debt and advance forward in life by moving out of their parents’ house, getting married, having kids, etc.
The problem is, at least one of these tradition milestones comes with a penalty: marriage. Millennials as a group are already less inclined to get married than previous generations and the federal tax system is not helping the situation. With exceptions for those earning above-average incomes, the $2,500 tax deduction mentioned above is available to every individual making student loan payments, but for married couples it is a different story. If a boyfriend and girlfriend are paying student loans then both the boyfriend and girlfriend are eligible for the tax deduction, but once the boyfriend and girlfriend become husband and wife they are in for an unpleasant surprise: rather than the $5,000 total deduction they used to see, the husband and wife are now only eligible for a total combined deduction of $2,500.
So, to sum it up: the millennials’ generational predecessors who, by and large, occupy positions of power in the country have created a hierarchy which requires a college degree for advancement, they have helped the cost of tuition for that degree to grow at an astounding rate through federal subsidization, they criticize millennials for not “growing up” fast enough, then they put penalties in place for those millennials who do try to follow the traditional path. At the risk of being labeled a narcissistic and self-absorbed member of the “me me me” generation, something about that structure seems unfair.
