After the COVID-19 pandemic upended the economy, fewer millennials say taking out student loans was worth attending college, a new survey shows.
Even with the federal government suspending payments for the vast majority of student loan borrowers through the end of the year, only 46% of people born between 1981 and 1996 said their debt was "probably" or "definitely" worth it given their current financial situation, according to a survey taken in September and released this week by the research firm Morning Consult. That’s down from 56% of millennials who answered the same way when asked the question in March 2019.
The firm, which said there was a 3 percentage point margin of error, surveyed 1,333 adults who took out student loans, including 518 millennials.
The cost of higher education has soared. Even after adjusting for inflation, college now costs two and a half times what it did for the oldest baby boomers when they entered college in 1964, according to a recent analysis by the AARP. What’s more, the 2008 financial crisis that led to the Great Recession means many millennials have had to endure two major economic catastrophes at critical times in their working careers.
“A lot of them graduated in the Great Recession, so they had difficulty being able to get on a career track and secure stable employment,” said Elise Gould, senior economist at the Economic Policy Institute. “Now we have this shock of this recession, and that makes it even more difficult.”
Another question from the same poll shows that millennials, more than other generations, feel the pandemic has hit them hard, with 39% saying it has had a “major impact” on their financial situation, compared with 29% of Generation-Xers and 17% of boomers. This question reflected responses from all 4,400 adults surveyed, including 1,287 millennials with and without student loans.
Indeed, compared to millennials, older generations were less regretful about having taken out loans to fund their education, not surprisingly. Among boomers, 67% said their student loans were “definitely” or “probably” worth it in September, only 1 percentage point less than in 2019. And among Generation X respondents, 51% gave the same answer, down from 55% in March.
While college graduates generally command higher earnings than non-graduates, the premium a degree brings has stayed flat for the last several years even as college prices and student debt have been rising, according to Gould.
“Many students can find it difficult to be able to use that degree and pay back their loans,” she said. “And many people with a college degree wind up being stuck in jobs that don’t require one.”