Category:  Clients

Boomerang Kids: Number of Recent Grads Moving in with Parents Higher than Ever

Almost 60 percent of young adults are receiving financial aid from their parents and one in five are still living at home, reports The New York Times. This trend has become increasingly popular over the last few years, giving this particular generation of recent graduates the nickname “The Boomerang Kids,” as they leave for college and return home upon graduation.

Crippling student debt and a less-than-welcoming economy have been the main source of recent grads returning home. Many in this demographic have graduated amidst the implosion of the housing and financial crisis, making the task of finding gainful employment increasingly difficult.

Of all the students who graduated during this tumultuous time for the job-market, almost 45 percent of them also have outstanding student loans that reach beyond $20,000. Almost half are underemployed or completely unemployed. Studies have shown that students who graduated in the recession of the ‘80s, are still earning less that their peers who graduated a few years later when the economy was doing better. This news is particularly discouraging for the Boomerang Generation.

The boomerang phenomenon is also having its own effects on the housing market. As student debt increased by an outstanding 400% between 2003 and 2014, the number of 25-34 year olds purchasing homes decreased by 8 points, according to a report by The New York Times on the correlation between college debt and home buying.

Before the recession, 25-34 year olds with student debt were more likely to be purchasing homes than those who had no debt. Their student debt signaled that they had in fact attended college and were more likely to have higher levels of income than those who had no student debt.  By 2012, this trend had reversed.

Experts contribute this to change to the fact that many recent grads, who have already borrowed large amounts from banks, are very conscious about what they agree to borrow. This fear of debt is one reason why the Boomerang Generation isn’t necessarily viewing moving home after college as a failure, but rather as a smart financial move.

While many hope that this is just a temporary fad, and that the class of 2015 will be able to graduate and enjoy good jobs and financial independence, many experts question if this is the beginning of a new life stage. The term “Boomerang Generation” paints the picture of a generation of lost twenty-somethings bouncing from job to job and sleeping in their high school bedrooms. Experts say that it those who seem the most off track that will eventually find their way and be the most successful and be the most fulfilled in their careers. As this new life stage emerges, and scares parents and economists alike, we will have to wait and see what long-term effects it will have.

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