1/3 of Young Americans Live Back Home With Their Parents
A full one-third of young Americans aged 18 to 34 now live at home with their parents. What happened?
Thanks to the sparse job market, nearly 1/3 of Americans aged 18-34 now live with their parents, according to a new report.
The “American Dream” days, where a high school diploma or a college degree guaranteed relative comfort, seem increasingly distant. The cost of college is at an all-time high, and rampant interest rates for student loans are fueling the next massive debt crisis.
Many new college graduates never enter the labor force at all—leading to over $1 trillion in outstanding student debt nationwide. Just like the subprime mortgage crisis, lending institutions with lax regulations made a quick buck selling people things they couldn’t afford.
It’s only a matter of time before the bubble bursts, and legislatures will have to address the potential failure of “too big to fail” lending institutions as well as an increasing percentage of the population with no credit, rampant bankruptcy, and little hope for home ownership.
The increasing number of debt-burdened young people living with their parents after graduation also means less people are buying houses. Real estate makes up about 17% of the nation’s GDP, and diminishing rates of new homeownership demonstrates the outward ripple effect of crippling student debt.
Though the situation is grim, it’s most likely an especially gloomy valley in the constant waveform of economics. Rather than a never-ending downward spiral to dystopia, things will likely start to look up as the job market evolves. However, the public outcry surrounding student debt is increasing, and some members of Congress are acknowledging the severity of the looming crisis. Last year, Massachusetts Senator Elizabeth Warren stated that “College graduates are getting squeezed from all sides. And here’s the deal: All across America, everyone—parents, teachers, even the federal government—is telling young people to get a college education, telling them to take on the debt to do it, promising that it will pay off in the long run… Meanwhile, the tuition keeps skyrocketing, interest rates keep rising, and students keep borrowing more and more. In fact, this country is saying, ‘You need an education, but good luck in paying for it.’”
Jobs may be scarce for young people, but they are not nonexistent. In the past, a college graduate could easily find a 9-5 at the local office park or manufacturing plant. Now, the internet provides resources to the individual user that used to be reserved to wealthy companies. Analytics, sales, publishing and multimedia tools empower creative individuals to generate wealth outside of the traditional model, and more people are turning to the Internet to explore its various business possibilities.
These emerging job markets, as well as intervention from regulators addressing the terrible interest rates, could potentially reverse the damage before it grows significantly worse.
According to Senator Warren:
“The government has to start doing its part to make good on the college investment. It’s time to help former students deal with $1 trillion in existing student loan debt by helping them refinance their loans at fair and reasonable rates. We need to lower the costs for those who have already graduated.”