Millennials are the young, digitally-savvy, generation born between the mid-1980’s and the early 2000’s. With a world of information at their finger tips, Millennials are swamped with information. Nowadays, the internet is replete with information, much of it biased or misleading making it all the more difficult to make sound financial decisions. According to a recent report from Experian, which draws from the findings of several other studies, the use of payday loans are declining slightly for the population at large but spiking among Millennials. Payday loans are short term loans with ultra high interest rates, often in the triple digits. Many payday loans are taken online while others are available through small brick and mortar shops usually found in strip malls. Payday loans offer money in minutes which Millennials seem to find alluring.
Payday loans are not the only loans Millennials are taking. According to a report by the Federal Reserve Bank of New York, Millennials are also taking student loans at breakneck speed. The volume of student loan debt in the U.S. has nearly doubled in the past decade. At the same time, student loan delinquency rates are increasing. Interestingly, college graduates with a bachelor’s degree or more have higher homeownership rates than non-college graduates whether or not they have student loan debt. In fact, the homeownership rate for college graduates with a bachelor’s degree or more is very similar whether or not the person is carrying student loan debt.
The conclusion is that younger Americans are taking on ever increasing debt. Payday loans are toxic because of the ultra high interest rates. Student loans, on the other hand, generally have reasonable interest rates and do not impair the ability to purchase a home. Payday loans are discharged through bankruptcy but student loans generally survive bankruptcy.
At the Law Office of Michael Primus we have helped thousands of clients get out of debt, stop wage garnishments, and start fresh through bankruptcy. If you live in Contra Costa, Alameda or Solano counties and have debt problems, contact us for a free in-office consultation. We have offices in Walnut Creek, Antioch, and Hercules.