As millennials begin to turn 40 in 2021, CNBC Make It has launched Middle-Aged Millennials, a series exploring how the oldest members of this generation have grown into adulthood amid the backdrop of the Great Recession and the Covid-19 pandemic, student loans, stagnant wages and rising costs of living.
Older millennials entered adulthood around the time of the 2008 financial crisis, which was followed by higher education funding cuts, rising college costs and slow wage growth. The result: Millennials became the student debt generation.
Even as the oldest millennials turn 40 this year and approach middle age, student debt continues to follow them.
According to a recent survey of 1,000 U.S. adults ages 33 to 40, conducted by The Harris Poll on behalf of CNBC Make It, respondents took out an average $21,880 in student loans for their education. Just 32% of those who took out loans have entirely paid them off, meaning the majority (68%) of older millennials are still paying down their student debt a decade or so later.
And while college degree holders are generally better off — enjoying improved job security, longer life expectancies, higher earnings and greater financial stability — more than half (52%) of older millennials with student debt say their loans weren't worth it.
"A constant uphill battle" and little choice
Erin Becker, 36, owes over $40,000 in federal and private student loans. Paying them off has been "a constant uphill battle," she says. "There is no comfort or security, just an ever-present unease about the future."
Becker was the first in her family to attend a four-year college when she enrolled at SUNY Potsdam in 2003 to study music education. Her parents took out student loans on her behalf.
"SUNY Potsdam wasn't a good fit for me. It was very isolating, and I didn't have a lot of friends in the music college itself. So I ended up getting pretty depressed and decided to move back home," she says. "I don't think I was mature enough to go to college right away. If I were to talk to my 17-year-old self, I would maybe say, 'Take some time to make sure that this is really what you want.'"
"When I was in high school, debt was never discussed," says Becker. "It was just like you go to college, that's what you did."
After working several odd jobs, Becker decided to get a two-year veterinary technician degree from Medaille College, a private college in Buffalo, New York, but this time she was responsible for covering the costs. She took out two private loans: one worth $8,835 and one worth $13,600. She graduated in 2010, owing over $20,000 in student debt and making just $12 an hour working at a veterinary practice.
"I was always paying the minimum amount due on my loans," she remembers.
Unable to make progress paying down her principal, she decided to finish her bachelor's degree (this time studying psychology) at the University of Buffalo and graduated in 2017. She took out an additional $32,000 in federal student loans to complete her degree.
"I had just over $54,000" in debt, she recalls. "In the time that I've paid it off, I've paid it down to maybe $49,000."
In October, Becker gave birth to her first child and now works part-time as an entry-level client services representative at a veterinary practice earning $15 per hour.
"It's frustrating and it's embarrassing, frankly. I feel like I'm smarter and better than where I am right now," she says. Her husband makes roughly $80,000 per year as a mechanical engineer.
"And I struggle with identifying myself outside of my profession," says Becker. "I want to do good. I want to make a positive difference, in the world, in my community, and I don't think I'm doing that right now."
But what frustrates Becker most is that she feels going to college and taking on debt was never a real choice in the first place.
"Was college worth it? The answer is yes," she says. "It's certainly more beneficial to have a degree than not to have a degree. You kind of have to go to college. A college professor once said that the four-year bachelor's degree is the equivalent of a high school degree now.
"In our parents' generation, there were entry-level jobs where you could have a comfortable life with a single income — that doesn't exist any more."
Paying down $200,000: "It was all-consuming"
Jeffrey Street, 33, graduated from the University of Tennessee in 2009 and still remembers how hard it was to find a job. "The job market was so bad," he says. "I was working for the City of Knoxville Parks and Recreation department in undergrad, and my job prospect for after graduation was to keep working for the Department of Parks and Recreation. I knew I wanted to do something different."
Street chose to attend law school at the University of Idaho, where he met his future wife, Shannon. When they graduated in 2012, the pair owed nearly $200,000 in student debt.
Shannon owed $17,125 from her undergraduate degree and $87,058 from her law degree. Street had no loans from his bachelor's but owed over $92,000 from law school.
"I remember thinking to myself that if I was very proactive in paying it off when I got out of law school, then maybe the debt wouldn't be so bad," he says. "But the average interest rate on our loans was about 6.5%. It was about $1,000 of interest per month."
Even after the couple passed the Bar Exam in 2013, they still struggled to find work. "I was literally putting in job applications to any job that I could get," he says.
Street eventually took a job stocking shelves at Target from 3 a.m. to 10 a.m. so he could network and apply for legal jobs during the day. He says he would keep his suit in his car and change into it in a 7-Eleven bathroom before interviews. Shannon took a job in the framing department of a local Michael's.
Eventually, Street landed his first legal job in Grand Junction, Colorado, where he earned $36,000. The couple later moved to the Dallas-Fort Worth, Texas, area for better jobs and slowly began making progress on their loans.
"Everything we thought about was student loans. It was all-consuming," he says. "We poured every extra dollar into our student loans. We did not vacation. We did not buy a new TV. (In fact we still have our TV from law school). We took secondhand furniture and clothes when offered. We just saved and saved."
Street says he and his wife put off having children for six years and did not attend friends' weddings because of their student loans.
Today, Street has $27,630 left in student debt and his wife owes $6,820. They now live in Boise, Idaho, have two young children and feel repayment is finally in sight. Street has even begun putting away money in a 529 fund so his kids "do not have to deal with the same burden."
And while Street says earning his law degree was necessary for him to become an attorney and is proud to have made such progress on his debt, both he and Becker say they support some kind of student debt relief — and addressing the cycle of student debt — for future generations.
"You can't accuse me of wanting someone else to take accountability for my student loans. I've paid my debts and I'm going to finish," he says. "But I went through it, and I can tell you the student debt process was not worth it.
"I wouldn't wish the student debt experience on anyone."
CNBC Make It will be publishing more stories in the Middle-Aged Millennials series around student loans, employment, wealth, diversity and health. If you're an older millennial (ages 33 to 40), share your story with us for a chance to be featured in a future installment.