June 16, 2006
Keep an eye out for more boomerang kids, the ones who move back in with mom and dad. In fact, the most recent crop of college graduates will be home a lot longer than their parents expect because of burdensome student loans, say observers.
A soon-to-be released study commissioned by AllianceBernstein Investments attempts to document just how much and how long the burden of college debt weighs down grads.
- The survey of some 1,500 21- to 35-year old college grads -- sometimes referred to as Generation Broke -- found this cohort owes an average of $30,000 in student loans; the 3 million students graduating from United States colleges and universities this year carry more than $40 billion in student loans.
- Parents with debt-laden grads may want to dig into their pockets to help their kids gain some financial footing, says Jennifer DeLong, AllianceBernstein's director of college savings plans; and, more than ever, parents with young kids need to start socking money away for college as soon as possible.
- Living with mom and dad, while not ideal, will cut costs; nearly a third of the respondents to the AllianceBernstein study say they had been "forced to move back in with parents or guardians or lived with them longer than they expected" because of education-related debt.
Even if they make sacrifices to trim costs, few respondents expect to pay off their college debt anytime soon. Indeed, 31 percent of those paying off college debt say Madonna will become a grandmother before they are debt-free.
Source: Lauren Young, "Mom? Dad? I'm Home!" BusinessWeek, June 5, 2006.
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