BusinessWeek and MSN have published an interesting article which describes those of us in our 20s and 30s (ie. me) as the most indebted generation. College seems to be the tipping point. Young adults begin to see the world from an individual point of view rather than as a son or daughter. By the time we left university, student loans and credit card debt overwhlemed us.
Rather, they would have overwhelmed us if we knew to give debt any consideration. Later, there is another tipping point, but it can vary from individual to individual. The impetus could be finding one’s self bankrupt. For me, it was three unrelated events: losing a job, a girlfriend, and an apartment in the same month. In this emergency I had to move back in with my father and get my life in gear.
“This is the first generation who won’t necessarily do better than their parents,” says Tamara Draut, director of the economic opportunity program at Demos, a research and advocacy organization in New York. “They’ve been told: ‘Apply yourself. You’ll get a job, a home.’ For many young people that’s not the case.”
I feel I identify with many of the comments throughout this article. Luckilly, I was able to clear myself of most debt once I came to my Financial Enlightenment. Since then, I purchased a reliable car that will last a long time and went back to school — two choices that required to take on some debt. Hopefully the new degree will pay off in some fashion.
The price of public colleges, where about 80% of all students are enrolled, increased 28% in the past five years alone, far more than in any five-year period since 1975. At private colleges, the total cost increased 17%. Those figures, it should be noted, already take inflation into account. At the same time, outright grants have been shrinking as a proportion of total financial aid.
I’m happy I’ve been out of my undergraduate studies for a while and my company is paying for most of my graduate expenses. I am more concerned about the future for my hypothetical children.
Updated July 16, 2010 and originally published December 6, 2005.