Millennials refill empty nests
Student debt prompts many Millennials to move back home, survey finds
Student debt prompts many to move home
Mom and dad, brace yourselves: 26% of Millennials in college say they plan on moving back home once they earn their degree to help save to pay off student loans, according to TD Ameritrade’s Young Money Survey.
The burden of college debt continues to weigh on young people between the ages of 20 and 26, according to the survey set for release Thursday, with 32% saying they owe anywhere from $10,000 to more than $50,000 on student loans. The average balance was $10,205 but was higher ($11,475) for those still in school.
Paying off this debt will take time, which is delaying life’s other big investments, such as buying a home, saving for retirement, getting married and moving out on one’s own. Millennials don’t expect to pay off their loans until they are 35, on average, the survey found.
Owing all that money is forcing cash-strapped individuals to move back home, continuing a trend that has been going on for years. Nearly half of the postcollege Millennials surveyed by TD Ameritrade said they had “moved back to my parents home after college.” And onefourth that are still in college said they “expect” to move back with mom and dad after graduation.
This group of Millennials
ages 20 to 26 said it would be “embarrassing ” to still be living with their parents at age 28, the survey found. But nearly three in 10 said embarrassment would not set in until they were between the ages of 30 and 34. Another 11% said they would find it acceptable to still live at home beyond age 35.
But young Millennials can turn living at their parents’ house into a positive financial move.
“Today’s college grads are clearly under financial strain due to escalating tuition and stagnant wages,” says JJ Kinahan, chief strategist at TD Ameritrade, a brokerage and investment management firm.
“Moving back in with mom and dad is a short-term sacrifice that could pay off in the long run. But that’s only if the ‘boomerang ’ young adults are saving and wisely investing the thousands of dollars they would’ve spent on rent and other living expenses and paying down their student debt.”
And while 67% of the young Millennials said they thought the cost of college was a “good investment,” another 23% said the education they received “will never be worth” the debt.
That student debt, these young Millennials say, has put large parts of their life on hold.
said it delayed buying a home. u40%u31% said it delayed saving for retirement. u27% said it delayed moving out of their parents’ home. u25% said it delayed having children. u21% said it delayed getting married.
The online survey, conducted March 17-22 by Head Solutions Group for TD Ameritrade, included 2,001 American Millennials ages 20 to 26 and teens between 13 and 19. The statistical margin of error was plus or minus 2.2 percentage points.