Under 30 Headed Where?

Gen Y? How about Gen S-Generation Screwed! That’s What Many Call Millennials and With Good Reason.

Now more than ever, young professionals are moving back home and working any old job, despite having post-secondary degrees. Why? Let’s count the ways.

As a college graduate in 2007, at age 22, I was faced with almost $20,000 in student loans and no full-time job. I considered grad school, but couldn’t justify more education just to defer loan payments. So I worked several part-time jobs (unrelated to journalism), earning wages that barely covered loan interest. And since most publications weren’t hiring, I wrote for them for free to sharpen my skills and gain experience – since an education alone doesn’t cut it on a resume.

Eventually I found a full-time job and began making larger contributions to my loan payments, but the unprecedented financial burden I bared during that first year post-grad has prevented me from reaching key milestones – like home ownership – and saving for the future. Fast-forward to the present, my generation still suffers.

Fresh out of college, Margret McLaughlin – who graduated from Saint Xavier University with a degree in mass communications – doesn’t see a bright future for our generation. “We’ll never be able to get married, have babies, buy a house or retire at the same age our parents were when they did those things,” says the 22-year-old receptionist at 97.9 The Loop.

Jessica Jurlow, another Saint Xavier grad, would love to own her own home, but she’s still trying to establish a career. “I graduated in December 2008 and have applied for over 100 jobs…anything that will help me get into the field,” shares the 28-year-old, who holds a bachelor’s degree in business administration and works in an unrelated field as an extended care aide at a local elementary school. “I’m working, but feel underemployed because I’m not learning new skills or gaining experience that will look good on my resume and help me get hired. Especially with the way the business world is forever changing and advancing technologically, I’m missing out on a lot.”

Ms. Jurlow’s predicament illustrates why Diane Swonk, senior managing director and chief economist at Mesirow Financial, believes that those working below their skill set are missing out. “When a lot of young people are unemployed or underemployed, they’re not getting a precursor to what it means to manage a career later in life,” she explains. “There are major hits to earnings potential, even among the most employable college grads, because they tend to accept a position that may be out of their field just to get any job. If you have to do that to pay your bills, fine. But if you can get by making less money in your area of expertise, you can succeed and it’s an investment in the long term.”

In the ‘80s, Ms. Swonk earned a graduate degree and took a job making less money than she would waitressing, just to stay in economics. “I might have been underpaid, but I was in a corporate environment, gaining valuable experience in specifically what I wanted to do,” she explains. “I built upon my expertise and earned more compared to my cohort, who had economics training, dropped out of the field and went into something else, but couldn’t earn as much because it wasn’t their field of choice.” However, grad school isn’t always an option for today’s youth, especially those having a hard time finding work.

“I considered going back to school for my MBA, but I don’t want to build up debt that I can’t pay back,” says Ms. Jurlow. “Working part-time, I can barely pay bills let alone afford a hefty tuition. So how am I supposed to start paying these loans unless I guarantee myself a job right out of grad school?” Yet, for many young Americans, taking on college debt has become the new normal.

According to the Consumer Financial Protection Bureau, student debt surpassed $1 trillion late last year. Tuition increases have students taking out bigger loans, and many 20-somethings are going back to college to escape the weak labor market and defer their loan payments, only to increase their debt.

“Up until five years ago, interest rates on federal student loans were tied to interest rates on 90-day U.S. treasury bills, which are currently one-tenth of one percent,” notes finance expert Terry Savage. “But now the government, who’s still borrowing at one-tenth of one percent, is screwing students by forcing their loan rates to 6.8 percent. Students need to protest. They need to ask the government, ‘Why have you fixed student loan rates at 6.8 percent when, based on the formula working just five years ago, it would be less than a quarter of a percent?’ But no one’s doing that.”

Alicia Howe, 26, has multiple student loans she’s been paying off for four years. “Hundreds of dollars come out of my account every month, and almost all of it goes to the interest,” states the Bradley University graduate, who majored in journalism. “I wasn’t having any luck finding a full-time position in the field, so I decided to change my career path after being diagnosed with ulcerative colitis and started my own business as a holistic health coach. Still, I’ve barely paid my loans down at all and can’t afford to pay more than I already do, so it feels like a lose-lose situation.”

Ms. Savage agrees, advising prospective college students to stay at home with Mom and Dad and attend a junior college to save money before heading off to a university. “Your parents don’t want you there anymore than you want to be there. One day, the education will be worth it. However, with the current interest rates on student loans, the debt isn’t worth it,” she affirms. “I don’t have a magic wand to create jobs. The challenge is to survive between then and now.”

But how do millennials survive? “The government may take money out of everyone’s paycheck for Social Security, but that won’t give you anything of value when you retire,” Ms. Savage says to young Americans. “Boomers are going to use it all up, so you have to take care of yourselves by saving early. Jobs may not pay you enough to live on, but you could always start putting away a little money into a 401K or IRA.” However, according to some millennials, including myself, it’s not that we’re not diligent about planning for the future. It’s that we simply don’t have the money to do it.

“We’re required to start paying loans six months after graduation, but most of us don’t have decent full-time jobs by then,” observes Ms. McLaughlin. “Our future is absolutely depressing. Older generations leave their messes to be figured out by younger generations. One band-aid after another is put on to patch the problems instead of fixing them. And our problems will be passed on to the next generation.”