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College debt has placed millennials at a significant disadvantage when compared to previous generations. Although they are already beginning to experience hard-felt impacts, the proverbial financial storm has only just begun. As a result, the financial future for millennials is significantly bleaker than that of their parents’ generation.
Simply put, millennials do not have enough assets to forge a substantial investment portfolio. This is directly attributable to the student loan crisis. As a result, they are unable to fully take advantage of compound interest, a powerful investment principle that uses time to amass fortunes. Additionally, millennials who don’t have the opportunity to learn from investment mistakes while they are young are more likely to make mistakes later on in life when they have more money to lose.
On the aggregate, millennials purchase significantly fewer homes than their parents’ generation (at comparable stages of life). By making monthly rent payments, millennials dwindle their funds instead of building equity. They are then unable to amass savings towards a down payment for purchasing a home due to their financial burdens. As a result, they are forced to rent for longer periods of time, costing them thousands of dollars over the course of years.
Millennial debt-to-income ratios are one of the most dismal statistics available. By taking an individual’s gross monthly payments and comparing them to how much they are required to pay for debt, especially student loan debt, a major cause for concern is raised: millennials are at a lesser likelihood to be approved for additional debt. In turn, home ownership rates will remain low as lending companies deny loans. Across the board, DTI ratios reveal the true extent of the loan crisis.
As a lingering burden, student loan debt can take a substantial toll on mental wellbeing. Regret, stress, and increased blood pressure carry negative consequences for overall health. In this capacity, total student loan debt is more than just a number: it's a psychological and physiological concern.
Alternative Courses of Action
Hindsight is 20/20. Although most millennials would prefer to not hear how they could have avoided their current situation, the truth is clear: millions of dollars in scholarship money goes untapped year-after-year. By incorporating this Free Money before and during college, student loan debt can be reduced to considerably more manageable amounts.
According to debt.com debt.com, prominent colleges, universities, and the U.S. Department of Education provide $46 billion in scholarship money and grants every year. An additional $3.3 billion is distributed by nonprofits, professional groups, unions, service clubs, chambers of commerce, churches, foundations, individuals, professional groups, and many additional associations.
By harnessing the combined power of several financial strategies, millennials could propel themselves into a much more favorable overall financial situation. For example, tax credits, tax deductions, payment strategies, and strategic credit usage are excellent ways to improve any financial situation. At the same time, millennials who read about these terms may not be sure what they mean or how they could implement them to improve their current situation…
Looking for a Better Way Forward?
If so, Free Money Meister can help. By providing scholarship assistance, student loan forgiveness and minimization guidance, our professionally trained team serves as your guide to navigate the challenges associated with the student debt crisis. We demystify the scholarship process while providing top-tier guidance for scholarship identification, scholarship strategy, student loan-debt minimization, and the power of Free Money. Interested in learning more? Click here to learn more about our services. We’ve helped countless former and current students just like you. By reviewing our services, we’re confident you’ll discover the optimal plan to expedite your path to financial freedom today.