by Nicholas Wyman, published on Linked In.
Heard of the slang Kippers?
As much as you love your children, you probably don’t want them living with you…indefinitely. But many parents are faced with that possibility, or already living it. One in four young adults between 25 and 34 are living with their parents or older family members, a number that has risen steadily over the past decade. One major factor contributing to the trend is the growing problem of student loan debt.
With national student loan debt at over $1 trillion and climbing, it’s a problem with serious economic consequences. Two-thirds of Americans who attend college borrow money, whether they graduate or not, and those who do graduate owe an average of $30,000 by the time they pick up their diploma. One recent Wall Street Journal article points out that the problem may be even worse than official numbers indicate, citing data from the St. Louis Federal Reserve that nearly 32 percent of borrowers are a least a month behind on their payments.
Not surprisingly, the burden of student loan debt affects borrowers’ ability to buy homes, save for retirement, and start their own families. And it’s undoubtedly a factor in the “boomerang kids” phenomenon—young adults moving back in with their parents because they can’t afford to strike out on their own.
A February report from the New York Federal Reserve shows a direct relationship between rising student debt and boomerang kids. By state, a $10,000 rise in average student debt correlates to about a 3 percent increase in the number of young adults living with their parents. According to the same report, there are now 12 states in which more than half of young adults are living at home.
This trend can affect parents’ finances as well. According to a survey from the National Endowment for Financial Education, 26 percent of parents with adult children at home have taken on related debt. 13 percent have delayed a major event such as buying a home, while 7 percent have delayed retirement.
Should parents expect to give up the financial security as well as the privacy and freedom of their retirement years? Or go into debt for the sake of their children’s education? The answer is clearly no. It is not necessary to borrow vast sums for a college degree in order to have a rewarding career that pays well.
There are a growing number of pathways that lead to interesting, lucrative careers without the burden of student loan debt. In the United States alone, there are five million jobs that need to be filled, but employers can’t find enough people with the general and job-specific skills they need to fill them. And many of these careers don’t require a college degree.
Today, some of the best jobs can be learned through vocational programs, on-the-job training and apprenticeships. I’m talking about careers in health care, IT, advanced manufacturing and hospitality, as well as highly creative careers for the artistically inclined, such as web design or textile design. Whatever your son or daughters interests and gifts may be, there is an affordable (and rewarding) pathway to his or her dream career.