Student Loans as a Financial Stressor for Gen Z and Millennial Pet Owners

Rising levels of consumer debt may have a dampening effect on pet (and especially dog) population and spending on pets over the near future. The Q3 2024 Quarterly Report on Household Debt and Credit from the Federal Reserve Bank of New York shows household debt from mortgage, credit card, and student loans rising 0.8% for the quarter to reach a record $17.94 trillion. Student loan debt exceeds credit card debt, at $1.61 trillion as of Q3 2024.

The unfreezing of federal student loans as of fall 2023, along with the political tumult surrounding the Biden administration’s student debt forgiveness initiatives, is a financial stressor for Gen Z and Millennial pet owners and potential pet owners in particular. Fall 2024 MRI-Simmons data indicate that 12% of Gen Zers and of Millennials have student loans, which average around $500 monthly, compared to 8% of Gen Xers and 3% of Boomers. Millennials account for the majority (52%) of student loan holders at 5.6 million, which includes 3.5 million pet-owning Millennials.

As proposed over the course of President Biden’s administration, student loan forgiveness would have amounted to $189 billion in eliminated or reduced student debt, affecting over five million borrowers.

In response to the COVID-19 health and economic emergency, the Department of Education suspended obligations and set interest rates at zero for the interim in March 2020. Regular interest charges resumed in September 2023, and payments began again the following month, thereby initiating or re-initiating significant monthly payment obligations for nearly 5 million dog owners and cat owners.

An initiative by President Biden to forgive $10,000-$20,000 in student debt was scuttled by the Supreme Court in June 2023, a few months before student loan obligations resumed. The Supreme Court ruling blindsided incautiously optimistic student loan holders: 16 million borrowers had already been tentatively approved for loan relief, and another 26 million had loan relief applications in process.

President Biden subsequently attempted loan forgiveness or loan repayment modifications under the Higher Education Act, but legal challenges from Republican-led states remain ongoing.

• In Fall 2023, the Biden administration launched the SAVE repayment program, which was designed to reduce payments, curtail interest rates, and simplify loan forgiveness. In August 2024, a Circuit Court of Appeals halted the program.
• In February 2024, President Biden announced that he was forgiving $1.2 billion in student loan debt for borrowers meeting certain income, loan balance, and repayment plan conditions, as well as those who attended low-value schools. In September 2024, a federal judge granted a temporary restraining order.
• In November 2024, the Biden administration began preparing two new programs for student loan forgiveness, but withdrew the plans after the re-election of President Donald Trump.

In his final days in office, as reported by The Washington Post (January 17, 2025), President Biden canceled $600 million in education debt for longtime borrowers and those defrauded by colleges. Simultaneously, however, congressional Republicans presented a budget reconciliation proposal that would repeal much of the Biden administration’s student debt forgiveness.

For more information on macroeconomic trends impacting the US pet market, see Packaged Facts’ latest report Pet Population & Ownership Trends in the US, 8^th Edition.

About the blogger: David Sprinkle is a senior pet analyst at Packaged Facts and is a regular contributor to pet industry journals.