Most millennials have affordable or nonexistent student debt—and safety nets already exist for truly unaffordable burdens
NEW YORK, NY — With student debt forgiveness becoming the higher education policy du jour, Manhattan Institute senior fellow Beth Akers questions the underlying premise: that millennials are drowning in student debt. In the latest issue brief in the Issues 2020 series, Akers breaks down the reality of student debt burdens on young people in the U.S., finding that those with debt tend to have modest burdens relative to their income. And for those with truly unaffordable debts, income-based repayment and forgiveness after 10 or 20 years (depending on employment sector) already exist.
While there is clearly room for improvement in our student lending system, Akers argues that sweeping debt forgiveness is based on faulty premises and will only serve to distract from fixing the actual problems that exist. The main findings of the issue brief include:
- Most millennials (66%) have no student debt, either because they did not attend college or did not acquire debt in the process.
- A typical four-year graduate has borrowed $28,500, which can be repaid with monthly payments of $181 on a standard, 20-year repayment plan.
- Only 6% of borrowers have more than $100K in debt. These high-balance borrowers tend to have graduate or professional degrees and often come from higher-income families.
- A graduate making the mean annual income for millennials (including those without degrees) would never be required to pay more than $173 per month, regardless of how much they borrowed.
ABOUT ISSUES 2020
The Issues 2020 series applies the Manhattan Institute’s breadth and depth of expertise on major issues of national public policy to the key arguments and proposals of the 2020 presidential campaigns. MI scholars identify where the central claims driving key debates reflect fundamental misunderstandings about what is happening in America. With succinct explanations of what the data show, they provide a much-needed corrective and a solid foundation for political debates about the nation’s future. Click here to read more.