A recent survey by Credit Karma has revealed a concerning trend among Gen Z borrowers: one in three, aged between 18 and 26, cannot afford to travel home for the holidays due to the burden of student loan payments. This financial strain is not only affecting travel plans but also the overall affordability of the holiday season for many young Americans.
Key Takeaways:
- 32% of Gen Z with student debt can’t afford holiday travel.
- Over 25% find the holidays unaffordable due to loan payments.
- Nearly 1 in 3 wish the holidays were canceled due to costs.
- A third of Gen Zers rely on parents for travel funds.
- 66% plan to incur debt this holiday season, partly for travel.
- 40% of Gen Z travelers will use credit card rewards for holiday travel.
- Alternative celebrations are suggested for those unable to travel.
Financial Strain on Festive Plans
The survey highlights a stark reality: the financial burden of student loans is significantly impacting the ability of young people to participate in traditional holiday activities. More than one in four borrowers state that their loan payments are making the holidays unaffordable altogether. This financial pressure is leading to a sentiment where nearly one in three borrowers wishes the holidays were canceled.
Parental Support and Rising Debt
For those who are planning to travel home, over a third are doing so thanks to financial support from their parents. However, not everyone has this support system. A majority of Gen Zers, 66%, are planning to take on additional debt during the holiday season, with a significant portion attributing this to travel costs.
Seeking Solutions
Despite these challenges, there are ways to mitigate financial stress during the holidays. Courtney Alev, a consumer financial advocate at Credit Karma, suggests exploring side hustles or temporary work to earn extra cash. Additionally, utilizing credit card rewards and points can alleviate some travel expenses.
Alternative Celebrations
For those who find traveling home unfeasible, Alev advises finding joy in alternative ways. Treating oneself to a nice meal or joining a local friend’s family celebration can offer a sense of holiday spirit without the financial burden of travel.
The Bigger Picture
This situation sheds light on the broader issue of student loan debt in the United States and its far-reaching impacts on the younger generation’s financial stability and lifestyle choices. As loan payments resume and economic challenges persist, the ability of young people to engage in traditional family and cultural practices is increasingly under strain.
Moving Forward
The findings of this survey are a call to action for policymakers and financial institutions to consider the long-term effects of student loan debt on the younger generation. It also highlights the need for more robust financial education and support systems to help young people navigate their financial challenges without sacrificing important life experiences.