The Rise in Student Loan Debt Impacting Millennials
Student loan debt is rapidly becoming the most significant form of debt in the United States. This growing financial burden is now a key factor causing many millennials to delay homeownership.
Despite the increasing student loan debt, federal student aid has noticeably decreased. Presently, funds for students are predominantly moving in one direction – away from aid.
The US Department of Education currently manages an extensive loan portfolio totaling $1.44 trillion, resembling that of a financial institution or strict lender. However, the department does offer considerable assistance and rewards to students. Regrettably, student aid is dwindling, with 1.6 million more students left without coverage compared to eight years ago. Moreover, federal grant awards are declining at a faster rate than the rise in post-secondary enrollment in the US. To illustrate, an additional 1.6 million students could have received grants for the 2017-2018 academic year if the pace of student aid had kept up with enrollment growth, as noted by Student Loan Hero.
From 2011 to 2018, there was a substantial 23.6% drop in the number of students receiving grants, far outweighing the 6.4% decline in enrollment. This trend implies that financial relief for education expenses is becoming increasingly scarce. Grants across various purposes, including Pell Grants aimed at the most financially vulnerable students, are experiencing notable reductions.
