The Millennial generation --Americans born between 1980 and the year 2000 -- may be the most educated generation in American history. Unfortunately, they are also among the most likely to be unemployed, carry excessive debt and face insolvency.

According to recent studies by the Pew Research Center and Demos, a nonpartisan public policy think tank, the recession has hit Millennials hard. The national unemployment rate among those under 25 was 18.8 percent in March, compared to an overall average of 9.7 percent. People under 30 face the highest percentage of unemployment or underemployment in more than 30 years.

Even as they struggle to find jobs, many Millennials are burdened with educational and credit card debt. According to the Pew study, 2008 graduates left school with an average of 24 percent more debt than 2004 graduates -- and nearly double the average of 1996 grads.

At the same time, Fidelity Investments reports that the average Millennial carries more than three credit cards and that a fifth maintain a balance of over $10,000.

Student Debt Burden Reflects a Troubling Fall in College Affordability

Tuition and fees have risen more than 400 percent in the last 25 years. Over approximately the same period, the balance of federal loans versus grants provided to students has see-sawed from a 39/55 percent average of loans to grants in 1980 to a staggering 64/26 percentage ratio.

The poorest students are suffering the most, according to an analysis of the Department of Education's National Postsecondary Student Aid Study by the Project on Student Debt. 87 percent of 2008 graduates who had qualified for Pell Grants -- those with family incomes under $50,000 -- had to borrow money for college. They also ended up owing about $2,000 more than the average student.

Twenty percent of students take out loans but don't graduate, leaving them with the debt burden but no degree. Since in most circumstances student loans can't be discharged in bankruptcy, students can be saddled permanently with unaffordable debt.

Excessive Consumer Debt, Failure to Save, Lack of Insurance Also Problems

Millennials are subject to the same economic factors affecting other American workers: wage stagnation, job security, access to affordable insurance and benefits, and rising costs of basic expenses, along with the general decrease in savings levels and increased consumer borrowing.

They also face challenges of their own. Only 61 percent have health coverage, according to the Pew study, making them the generation least likely to have health insurance.
An October 2009 study by Hewitt Associates showed that 60 percent of Millennials have cashed out a 401(k) plan because they needed the money -- a move that costs them a tax penalty and the foundation for a stable retirement. A November MetLife poll showed that nearly 70 percent have no cash cushion.

Related Resources

  • "Generation Y's steep financial hurdles: Huge debt, no savings," (USA TODAY, April 22, 2010)
  • "Millennials: Confident. Connected. Open to Change," (Pew Research Center, February 24, 2010)
  • "Student Debt 101: Why College Students Are Burdened by Debt and What To Do About It," (Demos, March 8, 2010)
  • "Quick Facts about Student Debt," (The Project on Student Debt, January, 2010)