MONEY

Call us Generation Debt.

Millennials are overeducated and underwater. Our generation is the most credentialed in American history, and the most broke. Our degrees came with hefty price tags, and our earnings haven’t caught up to our qualifications. Sixty-one percent of Millennials have gone to college, and close to half hold a postsecondary degree. By comparison, only about a quarter of Boomers hold a four-year degree. In 1960, when the oldest Boomers were starting high school, US Census data shows that just one in ten Americans older than twenty-four had completed a college education.

But Millennials are paying for those degrees, and we’re paying a lot more than Boomers did. Take your average Boomer born in the first year of the baby boom. If this average guy went off to a public four-year college in 1964, he paid around $7,900 (adjusted, like the rest of these figures, to 2020 dollars) in tuition, fees, and room and board for the year. Opting for a private school would mean paying just under $16,000.

Now take your average Millennial born in 1980, our generation’s first year. If she started at a four-year public college in 1998, she was looking at about $12,250 in tuition, fees, and room and board for that year alone; a year of private school education would set her back more than $31,500. And her Gen Z cousin, born in the first year of his generation? He paid a massive $20,900 as a freshman at a public school in 2015. If he opted for a private four-year college, he was looking at an astronomical $47,000 for his freshman year alone. That’s nearly a 300 percent increase in private education costs compared to what the freshman Boomer paid.

Upon finishing college, older Millennials were hit hard by the Great Recession of 2008, which thrust huge numbers of us into unemployment and ground our earning potential to a near halt. All of this hit black and brown Millennials even harder: non-white American families had less wealth to begin with, which meant more debt for their children, and racial discrimination made entering and remaining in the workforce even more challenging for African American and Hispanic Millennials.

Let’s dispel the myth that a college education makes you wealthier. It is true that having a college degree will get you higher wages than if you had only graduated from high school (or if you had not made it that far). But that’s largely because the wages of Americans without college degrees have collapsed, making college graduates better paid by comparison. In 2019, the Stanford Center for the Study of Poverty and Inequality found that the median earnings of a twenty-five-year-old college-educated Millennial man were more or less on par with what college-educated Gen Xers and Baby Boomers men earned at the same age. But Millennial men without college degrees were bottoming out, making close to $10,000 less a year than Baby Boomers made at the same age. “It’s not that going to college amounts to striking gold for most people,” the center’s director, David Grusky, told the Stanford News. “The big news is that if you don’t go to college you’re likely to do worse than ever. What makes college attractive is mainly that it offers some protection from that fate.”

And consider this: if not for the social safety net, Millennials would be the most impoverished generation in modern American history. That same Stanford report found that while the number of Millennials living in poverty at thirty looks, at first glance, to be on par with Gen X and better than Baby Boomer and Silent Generation thirty-year-olds, that’s only because Millennials receive a lot more in SNAP (food stamps) benefits, unemployment, and Social Security and SSI (Supplemental Security Income, cash assistance for the aging and people with disabilities). “Were it not for resources coming from government programs,” the authors write, “the millennial poverty rate at age thirty would be the highest across the four generations.”

And even with those benefits, more Millennial households live in poverty than any other generation. Millennials at age twenty-five—even those with high levels of education—are more likely to be unemployed than twenty-five-year-olds in any generation before. Despite being better educated, nearly half of us have worse jobs than our parents did, and are, as a result, downwardly mobile. “By every metric, this generation is the most educated in American history,” writes Malcolm Harris, in Kids These Days: Human Capital and the Making of Millennials. “Yet Millennials are worse off economically than their parents, grandparents, and even great-grandparents.”

Sixty-one percent of Millennials have gone to college, and close to half hold a postsecondary degree. By comparison, only about a quarter of Boomers hold a four-year degree.

Millennials are behind. We have waited longer than our Boomer parents did to get married, have children, or buy a home—and we may never do any of that. And despite what you’ve heard from yelling TV commentators, we’re not actually choosing to be broke, insecure, and alone. We already weathered what was supposed to be a once-in-a-lifetime Great Recession, beginning our working years in the worst job market in nearly a century. Now, we’re facing a second global crisis, which may be even more shocking in its magnitude and devastating in its impact. We’re watching the economy crash around us with the growing, gnawing fear that we might never be okay.

Degree-Rich, Cash-Poor

When Maddie Campbell was growing up, the path ahead was clear: go to college, get married, work a well-paying job, live in a nice house in an upscale suburb. That’s what her parents had done: Maddie’s mom had grown up in Dallas, Texas, and as a child she would point out one particular big house in her neighborhood. “I’m going to live there someday,” she would say.

In 2007, Maddie’s mother moved into her dream house. It was six bedrooms plus a guest house on two acres of land, a shimmering, palatial fantasy come to life. Maddie’s father was a freelance video producer, and he did well—few people had the pricey equipment required for video production, or the resources to buy, for example, the one-terabyte data storage unit he purchased in 1994 for $600,000. Maddie’s mother was a writer, mostly for high-end home and leisure publications.

A year later, the recession hit.

Video production work dried up as personal technology developed at a head-spinning pace. That massive one-terabyte data storage unit that had, just a decade before, set Maddie’s dad apart as a member of the technologically elite? Now you can buy an external hard drive with that much memory at Best Buy for $50—and it’s small enough to fit in your back pocket. The first iPhone was released in June 2007, and suddenly, it seemed like everyone was carrying around their own tiny personal computer, complete with a video camera and editing tools.

“Before it was like, is my mom going to go to Neiman’s or Nordstrom today?” Maddie (who is using a pseudonym to protect her privacy) says. “Now, my parents have to decide between paying bills or buying groceries.”

The house went into foreclosure. The bills mounted, and the good life ground to a halt. The reversal of fortunes was stunning not just in its significance but in its speed. “One Christmas when you’re eleven or twelve, you’re getting all these awesome new tech gifts and fancy stuff and you live in a nice house,” Maddie recalls. “And the next Christmas it’s like, we’re jamming out on socks.”

Maddie, a younger Millennial, was just entering high school when her parents were wiped out by the economic downturn. She watched their resources dry up, and her own—her college fund, mostly invested in the stock market, bottomed out. The family began a series of downwardly mobile moves: from their six-bedroom Texas estate into a two-bed, one-bath rental apartment in St. Louis, Missouri, then to a vacation rental in Orange Beach, Alabama, and finally to a house in Jacksonville, Florida. The reverberations of the recession fundamentally shaped Maddie’s view of the world, as they did for much of her generation. “I’ve witnessed a lot of instability culturally as I’ve grown up,” Maddie says. “It makes me want to help other people as much as I can with what I do have. But it also makes me very concerned for my clear and immediate future.”

Like many people her age, Maddie grew up believing that a college education was the clear path to financial stability. That assumption wasn’t necessarily wrong. The American economy shifted radically during and after the Cold War, with rapidly expanding opportunities in technology and the sciences, and in what became known as the “information economy”: jobs that required high-level knowledge, expertise, and proficiency. By the time Maddie and other Millennials were in their early years of primary education, clear divides had already emerged between the relatively prosperous college-educated “haves” and the struggling high-school-or-less have-nots. For the middle class, a bachelor’s degree, not a high school diploma, was increasingly the new baseline for a decent job. Troops of college admissions professionals filled out a higher education bureaucracy that created additional and allegedly meritocratic hoops for high schoolers to jump through—the SAT and the ACT, admissions packets and essays, interviews and volunteerism requirements—and also worked to advertise college as a necessary leg up for a broad cross-section of American young people. If Maddie wanted the trappings of the pre-recession good life she grew up with, she knew—like so many of her peers—that college was the best way to get there.

In 2014, Maddie headed off to the University of Kansas, part of a massive student wave: between 2000, when the oldest Millennials were coming of age and graduating from high school, and 2019, when the youngest were finishing their university years, college enrollment went up by more than 3.7 million students. In 1980, fewer than half of graduating high school seniors were college-bound. By 2009, 70 percent of them were.

In 1980, fewer than half of graduating high school seniors were college-bound. By 2009, 70 percent of them were.

That’s a stunning shift. In a single generation, a significant majority of graduating high schoolers heeded the advice of those who claimed to know best: that if we wanted to succeed, we had to go to college.

For the wealthy and to a lesser extent the middle class, that promise was true. If you were born into a wealthy family in the 1970s and you went to college, you had about a 50-50 chance of finishing. If you were born into similarly privileged circumstances in the 1980s and went to college, you had a 60 percent chance of getting a degree and enjoying the attendant boost in pay, health, and even happiness.

But the same isn’t true of students who grew up poor. While many more young people who grew up in low-wealth households are attending college—among Millennials, close to half enrolled—they have the same depressing graduation prospects they did decades ago: only about 12 percent actually graduate. And low-income college students are predictably more likely to take out loans to pay for college, leaving many of them deep in debt with nothing to show for it. Those numbers are even more stark for African American students, who are more likely to withdraw from higher education than they are to complete their degrees in six years.

It’s not that poor students are less able to hack it at college; it’s more likely that they’re working and even raising children while trying to attend classes, and can’t do it all. The archetypal college experience of the 1978 classic Animal House or late-nineties television drama Felicity—living in a dorm or a Greek house, playing Frisbee on the quad, and gaining the freshman 15 from binge drinking and eating dining hall food—is for the privileged few. While 62 percent of Americans think most first-year college students live on campus, in reality just 13 percent do, according to a 2018 report from Higher Learning Advocates, an education advocacy group. About 30 percent of college students are the first in their families to go to college. More than a quarter have children. Among financially independent students, 40 percent live at or below the poverty line. Unsurprisingly, most of these students work. A report by the Georgetown University Center on Education and the Workforce found that while some 70 percent of college students generally work for pay while also attending classes, about a quarter work full-time, and those full-time workers are more likely to be low-income. And students who worked more than fifteen hours a week received poorer grades than students who worked less, and were more likely to drop out. Students who drop out are the most likely to default on their student loans.

Americans now owe $1.5 trillion in student loan debt.

Maddie is one of them. Just weeks into her first year at the University of Kansas, she was raped by a football player after a Halloween party. For two years, she unsuccessfully tried to tamp down the residual effects of the attack—anxiety, depression, post-traumatic stress disorder. When one of her rowing teammates told her that she had been raped by the same guy, Maddie cracked. The two women reported their assaults to KU, but Maddie says that the school did little to help her, let alone level swift and appropriate consequences against her attacker (KU eventually settled the Title IX lawsuit Maddie filed against them, but with no admission of liability or wrongdoing). Here Maddie was also depressingly representative of her generation: nearly one in four undergraduate women in 2015—Millennials—experienced sexual assault on campus, a study by the Association of American Universities found. Struggling academically, Maddie withdrew from school, moved home, and, she says, spent the next year “lying on the couch in the fetal position.” Leaving college meant that Maddie’s loans came out of deferment; she needed to re-enroll or figure out a way to pay them. So even though she didn’t feel ready, she went off to New York University.

Between two years at the University of Kansas, a year off, and two years at New York University, Maddie accumulated about $100,000 in student loan debt. Her parents, who have their own loans and took several out on Maddie’s behalf, owe twice that.

This makes Maddie something of an outlier. A CNBC examination of Federal Reserve data shows that among Millennials in their twenties who hold educational debt, the average amount owed is more than $22,000. Close to 70 percent of 2019 graduates from four-year colleges owe money on a student loan, and the average grad owes nearly $30,000. But about one in ten Millennials owes, like Maddie, student loan debt in the six figures. When Boomers were in their early thirties, just 17 percent of them had educational debt to begin with; and among those who did, the average amount owed was about $5,600 (yes, that is adjusted for inflation).

Millennials were also raised on the narrative that going to a good college mattered. And “a good college” was often assumed to mean “a private college,” which meant more expensive. All of this meant higher college costs and greater student loan debt.

The big question is: Was it worth it? By one calculation, yes: yawning income inequality means that higher education is more necessary than ever, not to live in luxury but just to white-knuckle it into the middle class. You see this play out in the difference a degree makes. In 1980, when the first Millennials were born and Boomers were young adults, a bachelor’s degree earned you a 42 percent pay bump, while an advanced degree got you 62 percent more. By 2018, as a result of collapsing blue-collar wages, a person with a bachelor’s degree earned, on average, 77 percent more than a person with a high school diploma or less, and someone with an advanced degree earned 129 percent more. Today, a person with a college degree makes roughly the same amount as someone with only a high school education in 1989. Meanwhile, the cost of a four-year college education increased by 200 percent, and graduate degrees became 350 percent pricier. Wages, though, have not increased in real terms since the 1970s, which means we’re making the same but spending much, much more. For many Millennials, the burden of student debt may wipe out whatever income boost their degrees gave them.

Was it worth it? Well, you do the math.

Boom Times

It’s November 8, 1965, and President Lyndon B. Johnson is standing at a podium in the gymnasium of Southwest Texas State College, his alma mater. Men in jackets and women in knee-length dresses sit ramrod straight in the folding chairs covering the gym floor. The bleachers are filled to the top with onlookers. It’s the president’s first public appearance since his kidney stone and gallbladder surgery, and it’s an event: when he arrived on the San Marcos, Texas, campus, the school band greeted him with a rendition of the “Lyndon Baines Johnson March.” Now, as he announces one of the most significant achievements of his presidency, Johnson promises that his Higher Education Act will redefine America’s future, as his education at Southwest Texas State did for him. “Here the seeds were planted from which grew my firm conviction that for the individual, education is the path to achievement and fulfillment,” he intones in his Texas drawl. “For the nation, it is a path to a society that is not only free but civilized; and for the world, it is the path to peace—for it is education that places reason over force.”

Several decades, hundreds of thousands of students, and $2.6 billion later, the act hasn’t brought world peace, but it was nonetheless an unmitigated success in enabling hundreds of thousands of Americans to go to college. Even in 1965, Johnson understood the power of his legislation, which funneled millions of federal dollars into public colleges, offered scholarships and eventually low-interest loans to students in need, and established a National Teacher Corps to serve under-resourced areas. With his wife, Lady Bird, and one of his college professors nearby, Johnson told the packed gym that his ambitions were nothing short of radical. This legislation “will swing open a new door for the young people of America,” he proclaimed. “For them, and for this entire land of ours, it is the most important door that will ever open—the door to education. This legislation is the key which unlocks it.”

That new door did indeed swing wide open. Baby Boomers flooded into higher education in record numbers. Public colleges and universities were affordable—a summer job could cover most of the expenses—and newly generous federal and state government grants covered most, if not all, of the rest.

For Millennials, this sounds unbelievably luxe. While educational assistance still exists (if you paid part of your college expenses with a Pell Grant, a Stafford loan, or a federally funded work-study job, you can thank the Higher Education Act), when Boomers were going to college, there was more free money to go around, and no expectation that students would take on an extraordinary debt load: grants made up a greater share of financial aid dollars than loans.

Well-deserved credit for this easy access to higher education goes to Boomers’ parents and elders. The newfound prosperity after World War II meant that the US experienced an unprecedented baby boom alongside an extraordinary economic one. It was a moment of expansion and optimism, at least for the white families who had long seen American law and policy cater to their needs. A new economy, one requiring skilled labor, was emerging. By the time Boomers came of age, profound cultural shifts were also well underway, with young people—some of them older Boomers, some of them a generation older than that—pushing for an end to race and gender discrimination, and for greater equality overall. It’s hard to overstate just how far of a jump Boomers made in a single generation. In 1960, just a few years before the Higher Education Act was signed, more than 40 percent of American adults hadn’t gone to school past eighth grade. The average American had a tenth-grade education. Fewer than 10 percent had a college degree. By the mid-1980s, when the last of the Boomers were graduating from college, the proportion of Americans with a college degree had tripled.

The Higher Education Act was just one part of Johnson’s Great Society program, an ambitious agenda to combat poverty and make America a leader in education, health, and development. States did their part, too, contributing more than half of public education funds by the mid-1970s. In 1989, when most Boomers were in their twenties and early thirties, just 17 percent of twentysomethings held educational debt. And there was a clear relationship between the financial benefits of a college education and any debt incurred: the higher pay that came with a college degree justified the debt Boomers took on.

Boomers have been, from the time they came of age and for most of their adult lives, the largest American generation in history (until Millennials overtook them sometime between 2016 and 2019). Public policy radically evolved to meet their needs and cushion their entry into adulthood, even as the booming economy of their childhoods took a turn for the worse as they entered the job market. No, Boomers didn’t always have it easy in their early years of independence. But their parents had scrimped and saved and set up a system of public works that worked for them, helping to keep Boomers afloat and later enabling them to prosper, even as the economy suffered. But as Boomers came to power in city, state, and federal government, something shifted: while they hoarded resources for their own families, any sense of obligation to open doors for the next generation of young people seemed to recede. Boomers entered adulthood with few financial constraints and climbed steadily up the socioeconomic rungs, doing far better than their parents.

And then they pulled the ladder up behind them.

The Great Student Loan Plunder

Contrary to idealized images of Boomers as the Woodstock hippies, feminists, and civil rights activists of the 1960s and 70s, most of those agitators and culture-makers weren’t Boomers at all. While some of the very oldest participated in these movements, most of the generation actually came of age later, and younger Boomers in particular wound up much more conservative. Those famous bra-burning feminists protesting the Miss America pageant in New Jersey? That was in 1968, when babies born at the peak of the boom were just eleven years old (and for the record, no bras were actually burned). The generation-defining Woodstock festival? The oldest of the Boomers might have been in attendance—they were in their very early twenties—but the youngest hadn’t started kindergarten. When Martin Luther King Jr. gave his famous “I have a dream” speech in the shadow of the Lincoln Memorial, the youngest Boomers weren’t even born.

By the early eighties, Boomers made up a plurality of the electorate. And the first thing they did was usher Ronald Reagan into office, drawn in by his promise of lower taxes and trickle-down economics. Just days before the 1984 election, the New York Times ran an article titled “Making Mark on Politics, ‘Baby Boomers’ Appear to Rally Around Reagan.” It included a thirty-six-year-old Merrimack, New Hampshire, homemaker named Mary Beator, who seemed to be speaking for many in her cohort when she said, “I’m tired of being the middle class that pays for all of those giveaways.”

“I guess I have more to lose now,” she continued. “I’ve gotten attached to my creature comforts. I’ve started having a vested interest in the status quo, because I am the status quo.”

It was, as Ronald Reagan put it, morning in America.

That fertile financial landscape Boomers enjoyed was about to be razed for their children. The first thing Reagan did was declare war on Johnson’s Great Society, kneecapping or wholly obliterating many of the same programs that enabled Boomers to do better than their parents. Johnson’s Great Society, tellingly, sold its antipoverty programs on the image of white poverty: When Johnson went on a national tour to promote the program, he first dropped in on communities across Appalachia; Life magazine illustrated Johnson’s crusade with images of white families living in squalor in eastern Kentucky. Reagan, eager to erase Great Society gains, portrayed poverty as a black problem fueled by sloth, criminality, and crack cocaine. That made anti-poverty programs, and progressive social programs generally, less popular among the whites who were the majority of the electorate.

When he took office in 1981, Reagan cut taxes and ran up the national debt, leaving that bill to be paid off down the line. His administration quickly set about dismantling various aspects of the Higher Education Act, making it harder for college students to qualify for need-based aid. And while Reagan slashed grant-based aid, guaranteed student loan aid continued unabated—that is, the government gave away less money for higher education but made it easier for students to borrow. With decreasing public investment in education and loans increasingly available to make up for the significant grant shortfall, tuitions went through the roof, and in response, the federal government raised the ceiling on the amount of loans students could take out. This was where the seeds of today’s student debt crisis were planted.

In 1989, Dan Quayle became the first Baby Boomer to join the executive branch as George H. W. Bush’s vice president. At the end of Bush’s term, Congress made another round of disastrous changes to the Higher Education Act. Tuition and enrollment continued to surge, but Congress failed to expand Pell Grants and instead increased the amount that parents and students could borrow. And while federally subsidized loans had been subject to need requirements, a new category of unsubsidized loans became available regardless of financial need. Borrowing exploded.

In 1992, voters elected the first Baby Boomer president: Bill Clinton. As a candidate he had promised to do something about the growing student debt crisis, and as president he tried to fundamentally alter the system by making the government the direct lender, administering rather than simply guaranteeing the loans. The Clinton plan came under fire from privatization-happy Republicans; the conflict threatened to torpedo his direct-loan plan entirely.

And so Clinton played ball with the GOP, signing a bill that preserved his direct-loan program in exchange for privatizing Sallie Mae, the federal middleman that had been established in 1972 as a way to offer federally backed student loans to a greater number of students. Clinton’s compromise gave educational institutions the choice of whether to rely on direct federal loans for student aid or go with Sallie Mae. Making the government the direct lender would be cheaper, Clinton believed. He gambled that as students and schools relied on his direct-loan program, Sallie Mae would quickly cease to be relevant.

This bet backfired spectacularly. Sallie Mae transitioned from government-sponsored enterprise to private entity driven by shareholder profit. Unfettered by government restriction, it could be its own federally backed lender, collection agency, and private lender, increasingly offering students a mash-up of low-interest federal loans and higher-interest private ones (offering fewer opportunities for loan forgiveness), and then chasing down any delinquents. The company’s aggressive marketing arm also convinced colleges and universities the nation over to rely on Sallie Mae over direct federal lending, sometimes offering financial incentives to get schools to abandon the direct-lending program. A Republican-dominated Congress, on the other hand, formally barred the Department of Education from advertising their own direct-loan program. That the government’s direct-lending program was an inefficient bureaucratic mess didn’t help. Within just a few years, Sallie Mae had cornered the market on student lending. The company made billions.

By 1999, Boomers made up a majority of the House of Representatives. One of those Boomers, Lindsey Graham, then a congressman from South Carolina, was one of the first to make a novel argument: that private student loan debt should not be dischargeable in bankruptcy. This proposal soon found support. It was added to the Bankruptcy Abuse Prevention and Consumer Protection Act, sweeping legislation that radically overhauled American bankruptcy laws and was widely backed by credit card companies. When the bill landed on Clinton’s desk, though, he vetoed it, reportedly because his wife talked him out of signing it. Hillary, the New York Times later reported, had been briefed on the law’s potentially disastrous effects by a law professor named Elizabeth Warren.

A little more than five years later, though, the Bankruptcy Abuse Prevention and Consumer Protection Act gained bipartisan support in Congress. By then the new president in the White House was a business-friendly Republican: George W. Bush. He signed the bankruptcy overhaul bill into law in 2005, and students who took on private loans could no longer discharge them in bankruptcy. From 1999, when the bill came under consideration, and 2005, Sallie Mae, now a private company, spent $9 million lobbying Congress.

By 2015, more than 42 percent of twentysomethings (Millennials all) owed money on a student loan. Millennials owed much, much more than what their parents took on, and if those obligations pushed them underwater, the 2005 bankruptcy bill meant that they now couldn’t treat their educational loans like nearly all forms of consumer debt and declare bankruptcy. Between 1980 and 2011, the cost of college increased sixfold (even adjusting for inflation, the price of tuition and fees at a four-year institution nearly tripled). At the same time, grants dropped. According to a Demos analysis, the maximum Pell Grant in 1980 covered about 70 percent of a college student’s expenses at a four-year school. By 2011, it only covered a third. And while state financial aid was 100 percent need-based in 1980, that dipped to 73 percent by 2011. Private student loans filled the gap.

The average Millennial owes $33,000 in student loan debt. When the average Boomer was the same age, their educational debts amounted to just $2,300 in today’s dollars.

The 2005 bankruptcy bill was one final rung torn off the battered educational ladder that helped so many Boomers break into the middle and upper classes. And then, as the Bush presidency wound down, the Great Recession hit.

In the swirl of the 2008 financial crisis, the promise that college was the path to financial stability, let alone prosperity, was looking a little thin. But it was already clear that folks without degrees were doing even worse.

So instead of dealing with an unfriendly job market by gritting our teeth through underemployment and running up our credit cards to make ends meet, record numbers of us went to college. In 2000, 36 percent of eighteen- to-twenty-four-year-olds were enrolled in a two- or four-year degree program; by 2011, 42 percent were, a number that has now leveled off.

At the height of the recession, and in its wake, we also flooded into graduate school. Graduate school enrollment swelled 39 percent between 2000 and 2017. While only a small percentage of Millennials have graduate degrees, we still hold more graduate degrees than any other generation. And the costs are stark: according to New America, the average graduate of a professional program—the kind required to be, say, a lawyer or a doctor—leaves with $152,654 in cumulative student debt.

But college and graduate school had fundamentally changed. Systematic underinvestment by the federal government coupled with coffers emptied by the recession and newly generous student lending led states to slash funding for public college; as a result, tuitions rose. By 2018, state dollars spent on two- and four-year colleges had dropped by $6.6 billion, adjusted for inflation, from 2008. At the same time, tuition rose by more than $2,500 a year, shifting the financial burden onto students. And as any college student can tell you, tuition isn’t the only unbearable cost. Just about every aspect of going to college is several magnitudes more expensive today than it was for our parents. Textbook prices have increased more than 800 percent in the past thirty years; the average college student pays $1,200 for books every year. The cost of room and board has doubled, far outpacing inflation, and living on campus now costs nearly as much as renting on the general market. For Boomers, this wasn’t the case: the cost of on-campus housing stayed more or less steady from 1964 to 1980, their prime college years. As of 2015, a student at a private four-year college could expect to pay nearly $11,000 annually for room and board; a student at a four-year public university paid more than $10,400.

There was no escape from rising costs. Public colleges and universities, once charged with educating middle- and low-income students in their own states, began acting more like private colleges. Out-of-state students paid more than in-state ones, which meant greater revenue. Public colleges thus began recruiting beyond their borders, often shifting need-based aid set aside for in-state students to “merit aid” aimed at attracting out-of-state ones.

For younger Millennials like Maddie Campbell, college was still on the horizon when the recession hit. But the landscape quickly became a lot less inviting, and many students had fewer tools to navigate it. Students whose college funds were invested in the stock market suddenly found themselves with numbers that didn’t quite add up to tuition demands; others saw their parents, desperate from being plunged into debt themselves, drain those funds for survival.

Student loan debt, now not dischargeable in bankruptcy, had also been made lender-neutral—that is, as a result of the Bush bankruptcy law, students could take out loans to pay for education at sub-par for-profit institutions and would be unlikely to ever be able to discharge them. For-profit colleges operate by their own set of rules. Public colleges are funded largely by taxpayers and private educational institutions by tuition dollars and donations. Not-for-profit institutions are controlled by boards of trustees and exist primarily for education and research. For-profit colleges, by contrast, are basically corporations: they exist to make money, and are funded in part by investors who want to see returns. While most students who enroll in public or private colleges graduate in five years, students who enroll in for-profit institutions are far less likely to earn their degrees. Just 30 percent of graduates from for-profit colleges finish in less than five years.

But students pay whether they graduate or not, and now they could fund even a for-profit education by taking on student loans. A new moneymaking opportunity had blossomed, and predatory for-profit institutions proliferated, all on the backs of students who were young, unsophisticated, and disproportionately both nonwhite and the first in their family to go to college. These for-profit institutions, which educated a relatively small number of students at the turn of the millennium, more than quadrupled their enrollment in a decade. They charged high fees and offered few financial resources, while sometimes defrauding students with false claims about job placement and costs. Susan Dynarski, a professor of public policy, education, and economics at the University of Michigan, found that almost a million Millennials who had taken out loans to attend for-profit institutions went into repayment in 2011. About a quarter of them defaulted.

By 2010, student loan debt surpassed credit card debt.

“Boomers definitely benefited from accessing higher education, and that education translated for some of them into opportunities for rising and higher incomes,” says Reid Cramer, who is a nonresident fellow at New America, the former director of its Millennials Initiative, and the author of The Emerging Millennial Wealth Gap. “And conversely, Millennials did everything they were supposed to do in a recession, which is go back to school and invest in yourself so that when the economy recovers, you’re prepared to take advantage of that. They did that, they have more credentials than any other age group, but it hasn’t translated into rising incomes.”

Casualties of the Recession

Entering adulthood in five- and sometimes six-figure debt and looking for work just as a recession hit, the older half of the Millennial generation was screwed from the start. It took us longer to get work, and when we were hired, we were paid less—partly because of the economy, and partly because more of us entering the workforce were female, and black and brown, all categories of people who are systematically underemployed and undercompensated. The recession didn’t just damage our immediate ability to support ourselves, nor even just our long-term moneymaking potential; it fundamentally undermined our faith in the promise that a good job would mean we were taken care of.

But with little other choice, we adapted. Many of us took jobs where we could find them, often as temps or interns or contractors. We might have resented it, but these insecure positions became the new normal—and so we weren’t alarmed as crappy gig economy jobs with no benefits, basic worker protections, or even consistent hours proliferated. We even learned to make it seem like maybe we were choosing it all, that we preferred the flexibility offered by our #hustle. We learned the only people we could rely on were ourselves.

And, well, our parents.

The stereotype of the Millennial living in the parental basement is partly true: While most of us do in fact live independently, more young adults live with their parents today than at any time in the twentieth century. More than half of Millennials receive some sort of financial help from their parents, whether that’s Dad paying a cellphone bill or Mom keeping the kids on her insurance until they turn twenty-six (thanks, Obamacare!). This reliance isn’t because Millennials are lazy. It’s because we have more debt in a job market with more competition, less certainty, and fewer opportunities than Boomers had at our age.

Millennials make up close to a quarter of the US population, but hold just 3 percent of the wealth. When Boomers were our age, they held 21 percent.

And, unlike our Gen X predecessors, we didn’t rack up credit card debt. More of us lived within our means and didn’t open up credit card accounts at all. But that hurt us, too: we have the lowest credit scores of any other adult generation, and now we’re getting rejected for mortgages, apartments, loans, and new credit cards as a result.

Now we’re facing down the triple whammy of inflated housing costs, recession-suppressed incomes, and overwhelming student debt.

That was Maddie’s trajectory. After graduating from NYU in 2018, Maddie wanted to stay in New York but quickly did the math: between student loan payments, exorbitant rents, and limited openings in her field of study, it didn’t add up. So she moved back home with her parents in Jacksonville. She estimates she has applied to at least seven hundred full-time jobs in two years. She hasn’t gotten a single one. But student loans don’t wait for stability. To make her loan payments, she works gig jobs: she drove for Uber for a while and then delivered food for Uber Eats. She walked dogs for Wag and Rover. She babysits, house-sits, pet-sits. She’s pretty good at video editing and her dad has the software, so she sometimes makes “In Memoriam” videos for funerals when people in her community pass away. Still, she hunts for work.

“I hate the job search,” Maddie says. “It’s starting to grind me down.” There’s nothing fun or glamorous about the gig economy, with its low wages, no benefits, and absurd demands. “I would 100 percent not characterize myself as one of those ‘rise ’n’ grind, gotta hustle’ types, no thank you,” she says. “My ideal life is I live in a renovated Airstream van by the beach and I tour the country doing comedy. I want nothing to do with the hustle.”

But ideal or not, hustle she does, because that student loan bill still comes every month.

And it’s not as if Millennials who didn’t go to college fared any better. The Great Recession meant wages stagnated across the board and nosedived for people with a high school degree or less. While the recession hurt everyone, Pew found the average decline in weekly wages was double for high school graduates compared to graduates of four-year colleges.

College-educated Millennials may be doing better than our peers without degrees, but the outlook is still bleak. According to Pew, “The median net worth of households headed by Millennials (ages twenty to thirty-five in 2016) was about $12,500 in 2016, compared with $20,700 for households headed by Boomers the same age in 1983.”

And Boomers are pulling even further ahead while Millennials are languishing. You would expect that older folks, who have had decades to save, invest, and pay down their mortgages, would be wealthier than younger ones who are just starting their adult lives. Indeed, in 1998 the wealth gap between young workers and those within a decade of retirement age was significant: households headed by Americans aged fifty-two to seventy were worth about seven times as much as those headed by Americans twenty to thirty-five. In the ensuing twenty years, though, that wealth gap has nearly doubled, and Boomer households today are worth twelve times as much as Millennial ones. In fact, the average net worth of today’s young households has decreased by $2,600. For those headed by fifty-two- to seventy-year-olds, it’s ballooned by a whopping $452,400. In other words, today’s young adults are worth less, adjusting for inflation, than people in that same age range were worth in 1998. The over-fifties are worth almost twice as much as that same age bracket was worth in 1998.

“A rising tide in our country is lifting some boats more than others,” says Signe-Mary McKernan, vice president of labor, human services, and population at the Urban Institute. “Wealth inequality has worsened over the past fifty years. When we start to look at what groups are affected and what groups stand out, young Americans are one of the groups that stand out.”

The average Millennial is worth just $8,000, less than adults of any generation in three decades. Even though the oldest are pushing forty, we make, on average, just over $35,500 a year—20 percent less than Boomers made at our age. The massive wealth gap between Boomers and Millennials doesn’t look like it will ever be bridged, even as Millennials age.

“Millennial families are barely breaking even with families the same age over three decades earlier,” McKernan says. “At this point [in their lives], the Baby Boomers and Silent Generation were doing at least double as well as the previous generations.”

While we scramble to support ourselves, we’re also footing the bill for our Boomer parents’ golden years. Americans are living longer, and as huge numbers of Boomers age, Social Security and health care costs are skyrocketing. “Folks my father’s age like to say they’ve paid for those benefits, so they should get them in full,” wrote Jim Tankersley for the Washington Post, in a 2015 article titled “Baby Boomers Are What’s Wrong with America’s Economy.” “But they haven’t. The Urban Institute has estimated that a typical couple retiring in 2011, at the leading edge of the Boomer wave, will end up drawing about $200,000 more from Medicare and Social Security than they paid in taxes to support those programs. Because Social Security benefits increase faster than inflation, Boomers will enjoy bigger checks from the program, in real terms, than their parents did.”

Meanwhile, Boomer entitlement programs have been bolstered by Boomer politicians (and conservative Boomer voters) at the expense of investments in the young. When Boomers were entering the job market, the federal government spent $3 on future investments— things like research, education, and infrastructure—for every $1 it spent on entitlements like Medicare, Medicaid, and Social Security. Now those numbers are reversed. Entitlement spending will reach $5 for every $1 investment by the time Boomers are fully retired. At the same time, Boomers look at how Millennials are struggling and blame us for our alleged bad decision-making.

Here’s the thing: Millennials are happy to invest in our parents and our elders. We want them to have stable retirements. We want them to be able to afford the medications they need.

We just want our country to invest back in us, too, instead of sticking us with the bill.

Less White = Less Rich

The Great Recession may have defined Millennials’ economic lives, but the heart of the story is about race. Because Millennials are a more diverse generation, we are a poorer generation.

“We have a racial wealth gap,” New America’s Cramer says. “It’s been exacerbated by the Great Recession, and if you use that race lens, it appears there’s been no progress in America over the last thirty or forty years. It doesn’t look like we had a civil rights movement. It doesn’t look like there was a president Barack Obama.”

American wealth is profoundly racialized. White families have a lot more than nonwhite families. Part of the reason Millennials are so broke is that fewer of us come from the white families that have consolidated, and can draw upon, generational wealth. The United States was built on chattel slavery, creating a formal system of white political, economic, and legal supremacy. Even after that evil institution was outlawed, American law and policy continued to formally and informally privilege whites, from the Homestead Acts to the Chinese Exclusion Act through Jim Crow and the New Deal (the Social Security Act, for example, excluded industries where black workers were concentrated, leaving 65 percent of African Americans ineligible when the act was passed in 1935).

It’s no secret that the average white American family starts with an economic advantage over the average black American family. But our national narrative is one of steady improvement, of narrowing racial gaps and moving ever closer to equality. It turns out to be a little more complicated. There was, unsurprisingly, a significant racial wealth gap when Baby Boomers were growing up in the shadow of Jim Crow. In 1963, according to the Urban Institute, the average white family in America had $140,663 in wealth (assets like a home, retirement accounts, and savings minus debts), while the average nonwhite family had $19,504—a gap of more than $121,000. But by 2016, when Millennials were coming of age, this gap had widened into a preposterous chasm. The average white family is now worth over $700,000 more than the average black or Hispanic family.

This wealth disparity, accelerated by our vanishing investments in social and economic programs, is primed to keep growing. In the years since Boomers came of age, and as America has grown more diverse, family wealth has built on itself, and family poverty has become more entrenched. Lower-income families, a disproportionate number of whom are families of color, have less in savings, so their children need to take out more in student loans to go to college. And because of ongoing racial discrimination in hiring and pay, when those students enter the job market, they wind up making less in salary to pay those loans back. Black and Hispanic students are also less likely than white and Asian students to stay in college through graduation, in part because they are more likely than white students to be supporting themselves and supporting their families while they pursue their degrees. As a result, many Millennials of color entered the workforce with student debt but no degree, already in a financial hole, and finding themselves only qualified for lower-paying jobs.

And it gets worse. For-profit educational institutions, which helped build the wealth of Trump education secretary Betsy DeVos and graduate far fewer students than not-for-profit schools, target and disproportionately enroll students of color: while black students make up 13 percent of enrollees at public colleges, they are 21 percent of students at for-profit schools.

Many students at for-profits are tempted by the promise of flexibility. And indeed, some of them do graduate and thrive, but they tend to be the exceptions. Nathalie Nguyen, a thirty-two-year-old law student in Sacramento, decided to go to a for-profit law school because, she says, “the curriculum is catered to working people or people who went to school late in life and have decided to do a career change. You don’t need a bachelor’s degree to attend. When I was looking at schools, I was taking more into consideration the tuition and what I could do to offset the costs.” As the daughter of Vietnamese immigrants who could not afford to pay for her schooling, and already $80,000 in student debt from undergrad and graduate school, Nathalie couldn’t afford not to work, which took most full-time law schools off the table. But the law school she went to is only California Bar accredited, meaning she can’t practice anywhere else in the United States. She will also have about $40,000 in law school debt on top of her existing educational debt when she finishes.

The school she chose promised the diversity and working-class flexibility she needed, at a lower price than the private nonprofit options. It may, on its face, sound as though educational institutions that cater to underserved communities are performing a necessary service. But many are pricey, sub par, and fail to meet the needs of their constituencies. Just 22 percent of students enrolled at for-profit four-year colleges graduated from the same institution within six years (by comparison, the six-year graduation rate is 76 percent for students at private nonprofit schools and 65 percent for public ones). Among black and Hispanic students who took on student loan debt to pay for a for-profit college education—many of whom were promised the flexibility they needed to work and support family members while going to school—two-thirds never graduated. But they’re more likely to take on student debt: 88 percent of graduates of for-profit colleges leave school in the hole, owing an average of $39,950. Nearly half of those borrowers default within twelve years.

In 2016, 70 percent of white students graduated college with debt. For black graduates, it was 85 percent. Those black graduates then entered a labor market that undervalues their skills and underpays them. The average white Millennial household brought in $60,800 in income in 2016—50 percent higher than the income in Hispanic Millennial households, which averaged $40,500, and 63 percent higher than black Millennial household income, which was $37,300. Income is not the only driver of wealth, but it of course has an impact. “Each dollar in income increase yields $5.19 in wealth for white American households, but only 69 cents for black American households,” wrote Mel Jones, in a 2015 article on the racial wealth gap for the Washington Monthly. And educational debt doesn’t necessarily decrease even if you’re paying your bill every month: The Roosevelt Institute found that twelve years from the day she started school, the average black woman’s student loan balance is 13 percent higher than what she took out to pay for school. White and Latino borrowers, by contrast, had managed to pay down significant portions of their loans (black men saw their student debt unchanged).

Despite indebtedness across racial groups, white Millennials are wealthier than their nonwhite counterparts. When you add up cash and assets (things like a home and retirement savings) and deduct liabilities (things like student loan and credit card debt), white Millennials were worth, on average, $26,100 in 2016, a New America analysis found, while Hispanic Millennials were worth $14,670 and black Millennials just $5,700.

Income also requires having a job, something that is less likely for young people of color. Young workers overall face higher rates of unemployment, but young black and Hispanic workers fare worse: sixteen percent of them are unemployed, twice the rate of unemployment of young whites.

While Millennials are struggling, Baby Boomers are the richest generation in American history. Boomers are projected to pass some $68 trillion down to their descendants over the next twenty years or so. This massive wealth transfer means that by 2030, Millennial wealth is projected to grow to five times its current balance.

At least the eventual passing-down of Boomer wealth will level the playing field, right? Of course not. Centuries of racial discrimination will allow white Millennials—who make up just 56 percent of our generation—to inherit many times more than their black and brown peers. That’s in large part because black and brown Millennials’ parents weren’t cut in on the American dream, despite Boomers being born smack in the middle of the civil rights movement. Boomers have always been an overwhelmingly white generation, but a few decades of immigration made them marginally more diverse: while 82 percent were white in 1968, by 2015, that proportion had dropped to 72 percent. But whatever their numbers, those white Baby Boomers have maintained lifelong advantages that they are able to pass on to their children. They are far more likely to own their homes, and to own more expensive homes, than Baby Boomers of color. White families are also more likely to have a whole assortment of assets that their black and brown peers don’t. About 60 percent of white families have retirement accounts, while large majorities of black and Hispanic households do not—62 and 69 percent, respectively, do not have any retirement assets.

“White families are about five times more likely than African American and Hispanic families to inherit money or receive a large gift,” the Urban Institute’s McKernan says. “And when they do receive that gift or that inheritance, it’s larger. So this disparity contributes to the wealth gap—this is money that can be used for major family investments, like college or a down payment on a home.”

More than one in four white families report having received an inheritance, compared to just one in ten black and Hispanic families. And white heirs receive ten times as much money as black ones.

For black and brown families, the obligations often run in reverse: it’s children who are supporting older family members. According to a Clark University poll, 86 percent of African American parents and 74 percent of Hispanic parents expect their children to support them in old age. That’s not out of selfishness but necessity. While white families are typically able to systematically save and draw upon generational wealth, black and Hispanic families are much more likely to be living paycheck to paycheck. Across income levels, black and Hispanic families report significantly lower abilities than white families to cover a $400 emergency. While more than a third of white families making less than $40,000 a year said they could pay $400 with either cash on hand or a credit card they could pay off at the end of the month, only 20 percent of black families said the same. Among wealthier Americans, 83 percent of whites making more than $100,000 a year could easily cover a $400 emergency, compared to just 63 percent of African Americans. In other words, income inequality isn’t the biggest driver of insecurity; wealth inequality, heavily driven by race, is. White Americans, whether they are low-income or higher-income, have more wealth and resources than Americans of color, and those benefits and the stability they bring are passed on to their children.

This is Justin Pinn’s reality. Though he attended Georgetown on a full ride, he worked two or three jobs at a time while in school, and still managed to rack up significant credit card debt. Scholarships didn’t cover all of his needs in Washington, DC, and there were bills to pay and people to help back home. “It’s not lavish expenditures” that people ask for, Justin says. “It’s, ‘Hey can you help me with my light bill, this medical bill.’ ” As the kid who made good, what can he say—no? Of course he helps out. “I am blessed and I can make up for this in my thirties,” Justin says. “My salary is going to increase. That’s the story I’m telling myself. But at the same time, I haven’t been able to put money away for a house.”

Millennials in America are also more likely than Boomers, Gen Xers, and even Gen Zers to be immigrants, Pew found (while Gen Zers are more likely to be the children of immigrants). With that often comes a series of financial obligations not just to parents but to siblings and extended family members both at home and abroad.

It may be tempting to read these statistics and conclude that black and Hispanic families are perhaps just making bad decisions: not saving enough of their wages, not buying homes as early and often as they should, not getting college degrees at comparable rates. If only it were that simple. In fact, controlling for income, black families save more and spend less than white families, suggesting that financial profligacy is not driving the wealth gap. Nor is education the “great equalizer” that self-styled race-blind commentators say it is. The Samuel DuBois Cook Center on Social Equity crunched the numbers, and they’re outrageous: A white household headed by someone with a college degree sees, on average, a greater income than a black household headed by someone with a graduate degree. A black household headed by a person with a bachelor’s degree still earns less than a white household headed by a high school dropout.

Black and Hispanic Millennials, then, need to have even more credentials—more degrees—than their white peers to be hired for the same jobs and make anything close to the same amount of money. And with less access to family wealth to pay for those degrees, black and Hispanic Millennials take on more debt. This puts them further in the hole, requiring them to spend more years in school, with the attendant student debt, to see anywhere near the same payoff down the line, which in turn pushes back their ability to save for retirement or buy a house. Put plainly, Millennials—and especially Millennials of color—have to work harder for less.

“I don’t think there’s been a full accounting of what our country has put Millennials through,” Justin says. “From [Boomers’] perspective we have so many opportunities, but they don’t realize the floor wasn’t underneath us. We’ve had to build our own floor. We were in a hole. I look back at credit card bills and this and that and I’m making headway, but I think back and it’s like, wow, those expenses were racked up because of a recession and because my parents didn’t have work—it was just what you had to do.”