Monday, November 14, 2011

The Empty Nest Is Becoming Less Empty – The Kids Are Not Alright

The New Economics of Family Life – Grown Children with Massive College Debt and No Jobs

There is an old joke that goes something like this

Priest:  Life Begins at Conception.

Rabbi:  Life Begins when the kids grow up and leave home and the dog dies.

Many times old jokes are the funniest. (Pet Lovers: The dog dies of old age after a wonderful life with a loving family).  This is not so in the joke above.  A Wall Street Journal Article has the gloomy headline

and the article documents, as one might expect, the economic and social consequences of an American societal evolution where children grow up, graduate and are unable to find a job or have to take a job that pays so poorly they cannot live on their own or support themselves and their student loans.

Here are the startling statistics.

As recent college graduates scramble to find full-time jobs, numerous parents are helping their children pay bills or letting them live at home again. About 59% of parents provide or recently provided financial assistance to children aged 18 to 39 who weren't students, concluded a May survey of nearly 1,100 people by the National Endowment for Financial Education.

According to Census data, 5.9 million Americans between 25 and 34 years of age—nearly a quarter of whom have bachelor's degrees—live with their parents, a significant increase from 4.7 million before the recession.

The cause will not and should not be news to anyone.  The combination of crushing student debt and lack of jobs, even for those with a college education is causing economic hardship for the young and for their parents.  Even worse, as the years of economic difficulties continue, the trend for young people to have to continue to receive economic aid from the parents long after they have left home, or for them to have to return home is becoming permanent.

One person’s story is illustrative of the problem.

Personal trainer Debra Jacobson shares her Jupiter, Fla., home with two adult daughters and a teenaged one.

The 60-year-old divorced mother says she can't afford home insurance or health coverage "because I am supporting these three daughters with food and a roof over their heads." She figures that costs around $600 a month.

One daughter has $20,000+ in college debt, and another, who studied what should have been a good career major has this problem.

Jackie, who is 26 and teaches part-time, owes about $60,000 on the loans she took out to get her mechanical-engineering and math degrees. "I feel like a burden" she says of living with her mother. "What is there to be proud of?"

The U. S. is increasingly becoming a society in which we price college so high that lower and middle income families cannot afford it, and students leave with a degree and immense debt, only to find that they  cannot find jobs that will pay them enough to live on their own and pay back the debts. 

What kind of society does this to its children?  

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