From student loans to regulation, millennials have barriers to the business world their ancestors wouldn’t have dreamed of.
The can-do attitude that birthed this country succeeded despite tremendous hurdles – shorter life spans, the labor demands of farming and land development and the wartime rigors of our nation’s infancy. Between then and now, entrepreneurs had relative freedom to develop technology, medical advances and business opportunities that have led to a prosperous nation.
Today’s budding entrepreneurs arguably face just as many hurdles, only now it’s not health, manpower or war that’s thwarting opportunities; it’s government. From student loans to regulation, millennials have barriers to the business world their ancestors wouldn’t have dreamed of.
CNBC recently reported that this year’s college graduates are leaving campus with the most student debt in U.S. history – 70 percent of students this year graduated holding average loan debt of around $35,000. In addition, federal student loans are four to seven percent, with many private loans “even higher.”
Right out of the gate, many college graduates saddled with debt in a highly competitive job market are stuck taking any job they can get to work off their loan. While not impossible, that sure doesn’t leave a lot of time or energy to develop a business idea, create a new product or service or a plan to pursue either.
Even with a business plan in hand, student loan debt can put a damper on today’s bright, multi-tasking millennials when it comes to start-up capital. Lending companies are understandably leery when young, unproven borrowers seek new business loans on top of college debt.
Which brings us to regulation. JCN Co-Founder Bernie Marcus and 22 year old GenFKD co-founder Justin Dent said in a recent Forbes op-ed that innovation will drive the millennial age of entrepreneurship, as long as government gets out of the way:
“Whether it’s the aura of “Shark Tank” or having a friend who builds a successful app for a living, Millennials have grown up with a new respect for entrepreneurship. Their enthusiasm for starting their own business or going out on their own should be nourished to embrace the new economy, not put off by the huffing and puffing of politicians and bureaucrats.”
That “huffing and puffing” refers to the good-sounding, pro-labor rhetoric that disguise regulations that restrict economic growth and limit employment opportunities. Dodd-Frank, for instance, continues to strangle small business growth by over-regulating community banks and thus limiting access to capital. For aspiring business owners looking to start the next Uber or Airbnb, that is, develop disruptive innovations in the app age, they face growing local, state and federal regulations spawned by special interest groups – like taxi companies – who are threatened by up-and-coming, innovative competition.
But the future doesn’t need to look so bleak. As the CNBC piece indicates, there is some innovation also happening on the student loan front. Financial companies are starting to offer debt-relief and seed money opportunities for promising new entrepreneurs.
This is a good start. JCN member Stephen Bienko, who as creator and CEO of 42 Holdings, is not far removed from being a millennial himself. He has said here previously that just as the American Dream differs from generation to generation, millennials dream just as big. They just have a different view in their rear-view mirror:
“Millennials grew up with it all. They opened the doors for our information highway. They saw the world crash around them and have by default been recommitted to the business and personal growth of others. They have been forced to complete an expensive education without a salary to go with it. This is okay, because our future is in their hands and they have the knowledge and compassion while increasingly gaining the wisdom needed to bring our American culture and economic strength back to where it should be. This generation of millennials will bring back the American Dream.”