Impacts of Millenial Student Loan Debt on Transportation Choices

The Federal Highway Administration’s Transportation Policy Unit has a series of reports on Transportation Futures. I was involved in one of them as an advisor to the consultant, though my name is not on the report, so I am not responsible. The report  is now online:

Figure 18. Transportation and Loan Payment as Percentage of Income
Figure 18. Transportation and Loan Payment as Percentage of Income


Impacts of Millenial Student Loan Debt on Transportation Choices

Now the largest generation in America, the Millennials are not driving at the same rates of their predecessor generations, the Baby Boomers and Generation X. There have been plenty of studies about the millennial generation’s lack of interest in driving. Many conclude that Millennials are fascinated by technology or urban culture.

According to AAA’s findings of the 2013 ‘Your Driving Costs’ study, annual automobile spending for an average sedan owner are $9,122 (Based on 15,000 miles annual usage). For someone newly out of college with student loan debt, automobile ownership may feel out of reach. Millennial student loan debt is a widely discussed topic. Approximately 40 million Americans hold student loan debt. Currently more than 70 percent of U.S. students who graduate with a bachelor’s degree leave with debt, averaging $28,400. According to the White House Council of Economic advisors, 61% of adult millennials attended college, compared to 46% of their Baby Boomer parents. In 2014, the total outstanding student loan debt in the US surpassed $1 trillion.

This paper attempts to investigate the impact of student loan debt along with other variables on the millennial transportation choices.


The data was tortured looking for a relationship. If there is one, it is weak. For instance see the finding buried on p. 34

“In general, cutting back on transportation expenses may not be a central priority for those with student loans, as their job earnings enable such individuals to handle rising transportation costs. Indeed, the data shows a positive relationship between income and student loan value (Figure 15).

Taking into account all student loan holders, the relationship between student loans and transportation expenses appears unclear. While some analyses suggest a slightly positive relationship (i.e., the uptick in transportation expenses for loan-holders), many of the other trends can be explained by Figure 15. Student loan holders in our data are generally well-off, which would contribute to higher transportation expenses.

Across the board, people spent less on transportation as a percentage of household expenditures post- 2008, but Millennials showed a particularly large difference between loan-holders (Figure 16, right) and those without loans (Figure 16, left). While we might consider this drop to be connected to student loan commitments, a number of analyses seem to refute this idea.”