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Generations defined
• Millenials• Born 1977 – 1992 (about 21 – 36 today)• ~30% of the adult population• ~75 million people
• Generation X• Born 1965 – 1976 (about 37 – 48 today)• ~19% of the adult population• ~45 million people
• Baby Boomers• Born 1946 – 1964 (about 49 – 67 today)• ~34% of the adult population• ~80 million people
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Millenials
• Large percentage from divorced families• Respect those that help them. Feel entitled• Expect authority figures to fix things/resolve conflicts for them• Energetic workers who prefer collaboration and “coaching” management
style• More apt to trust social/technical networks than proximate individuals• Has a “parents will pay” attitude about finances and is hyper brand
oriented• Generally optimistic and feel they can make a real difference• 45% use a credit card for necessities/70% define financial stability as
paying all bills on time• 28% have been contacted by a bill collector in the past year• 24% have missed a credit card or other debt payment in the last 12
months
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Generation X
• Historically high rates of divorce• First generation of latchkey kids where both parents worked• View respect as based on personal character and relationships• Treat work as a means to an end. Value leisure• Skeptical of large organizations. The entrepreneurial/small business
generation• Place trust largely in personal connections• Skeptical of large organizations• Financially take a hedge and borrow approach• Relatively more pessimistic
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Baby Boomers
• Strong nuclear family• Respect accomplishments and credentials• Treat work as significant. Long hours, lots of meetings, status conscious• Tend to question authority and respect the successful• Financially are spenders and borrowers• Believe they make a significant contribution to society
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Generational financial picture
First Mortgage
Second Mortgage
BankcardRetail Card
Auto Loan
Student Loan Avg. Debt
Baby Boomer 72.1% 10.2% 4.2% 0.5% 4.8% 1.4% $101,951
Generation X 76.3% 5.9% 3.6% 0.5% 5.8% 3.3% $111,121
Generation Y 59.9% 1.4% 5.2% 1.0% 13.7% 15.1% $34,765
U.S. Average 72.6% 8.3% 4.2% 0.5% 5.8% 2.9% $78,030
Table Courtesy of Experian
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What does all of this mean?
• There is a large generation of borrowers that look at education as an entitlement
• Handholding will be the new norm• Millenials don’t know the difference between good and bad debt• Being poor while ordering a Starbucks coffee and texting on an iPhone• PLUS borrowing is often “reluctant” borrowing• Technology is the key to outreach• Generation X is loading up on parent debt but increasingly find it hard to afford• Perspective, perspective, perspective – loan balances are still affordable even
with the current cost of college• For older students/families, trust is the key to connecting with delinquent
borrowers• For younger students, messaging and how it’s channeled is the key to
connecting with delinquent borrowers• Borrowers will continue to subordinate student loan debt• Race shapes borrowing habits and debt
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