Studies have shown that student debt can be a major obstacle in the way of achieving financial freedom for millennials. A large majority of the millennial workforce have benefited from student loans, which they have to repay. Upon graduation, many who are lucky enough to enter the employment market find themselves in an intricate financial maze. Among the financial decisions baying for their attention include family aspirations, retirement savings, student loan repayment, rent and home ownership not to mention basic survival.

The balancing is tough considering the median salary for entry-level employees for the first few years rarely exceeds KSh. 30,000. It’s for this reason that most millennials have resigned themselves to tenancy. As it happens, in major urban centres like Nairobi, it is estimated that over 75% of dwellers rent houses. One of the key financial milestones for any adult is home ownership. However, achieving home ownership can be an uphill task if you have multiple streams of cash outflows and a paltry salary to count on.

So what’s keeping millennials away from home ownership?

Recent research has shown that servicing of student loans is one of the burdens which derail millennial types from achieving home ownership. In the US for instance, a recent study by the National Association of Realtors and American Student Assistance found that millennials delayed owning homes for more than 7 years due to student loans.

Millennials have fallen victim to life in a more complex operating environment with inflation, interest rates, population growth and other systemic uncertainties that threaten economic stability. Not only is it harder now to secure a student loan, repaying the loan is the more bewildering puzzle.

This loan repayment conundrum has over-spilled into the home ownership dilemma. Most millennials begin their careers in fast-growing cities with aspirations of home ownership while paying rent and other living expenses. In the case of mortgages, the most common strategy for home ownership is to save for the down-payment over time since it is usually the largest installment to pay for the mortgage.

However, many find it an uphill task owing to the countless expenses together with the obligation to submit a monthly amount to the higher education loans board. As a result, some choose to dedicate their meagre earnings towards loan repayment before embarking on the home ownership expedition. This may take a few years depending on the loan amount and the interest, and along this uncomfortable trip, loan defaulters are never lacking.

Recent data from the Higher Education Loans Board (HELB) shows it has over 85,000 loan defaulters owing KSh. 9.7 billion while another 132,233 beneficiaries are servicing loans worth Sh19.8 billion. The total is KSh. 29.5 billion. Given an average house price of KSh. 2 million, this amount could afford 14,750 houses.

As it stands, more than 75 per cent of urban dwellers are tenants, a good number of them are millennials, constrained from home ownership by among other factors, student debts.