Gen Z Student Loan Debt Delays Major Life Milestones, Study Finds

Student Loan Debt Pushing Gen Z to Delay Life Milestones

Nearly two-thirds of Gen Z borrowers have postponed at least one major life milestone because of their student loan debt, a new report from Gallup and the Lumina Foundation reveals. The findings, released Tuesday, highlight the growing financial strain on young Americans amid a U.S. student loan debt total exceeding $1 trillion.

Pandemic-Era Pause Ends, Wage Garnishment Looms

The report comes as the pandemic-era pause on student loan payments has ended, reintroducing the threat of wage garnishment for borrowers in default. This financial pressure has compounded affordability challenges for millions of Americans.

Half of Borrowers Delay Life Events Due to Debt

More than half of all borrowers have delayed significant life milestones because of student loan debt, according to the Gallup-Lumina study. The impact varies by generation, with Gen Z most affected:

• Gen Z: 66% have delayed at least one life event
• Millennials: 59% have delayed at least one life event
• Gen X: 50% have delayed at least one life event
• Baby Boomers: 32% have delayed at least one life event

Top Delayed Milestones: Retirement Savings and Education

The most commonly delayed life events include saving for retirement and returning to school. However, student loan debt has also impeded other major financial commitments:

• Buying a car: 31% of Gen Z borrowers report loans have held them back
• Buying a home: 33% of Gen Z borrowers say loans have blocked this milestone
• Getting married: Loans have delayed this for many borrowers

These delays add to existing housing affordability challenges, as new homebuyers already spend a higher share of their income on housing compared to existing homeowners, according to Axios' Emily Peck.

Americans Still Value Higher Education, But Cost Remains a Barrier

The Gallup-Lumina report also examines perceptions of higher education in the U.S. While Americans continue to recognize the value of a degree, cost remains a significant obstacle to attainment:

"Americans have not lost faith in higher education. But faith alone will not close the gap between aspiration and attainment."

Key findings include:

• Only 10% of current college or certificate program enrollees believe all people have access to quality, affordable higher education
• Just 6% of adults who never enrolled in postsecondary education after high school share this belief

Study Methodology

The Gallup Alumni Survey collected responses from November 10 to December 1, 2023, including 1,266 associate degree graduates and 4,667 bachelor's degree graduates. The margin of sampling error is ±1.4 percentage points.

The Lumina-Gallup study surveyed:

• 6,010 students currently enrolled in postsecondary education
• 5,052 adults previously enrolled but not completed
• 3,000 adults who never enrolled in postsecondary education

Web surveys were conducted from October 2 to October 31, 2023.