Twenty-Somethings' Debt Burden Averages $45,000, Report Finds

Many twenty-somethings are carrying around a huge burden. And no, it's not the regret of last weekend's hook-up.

Twenty-somethings are holding $45,000 in debt on average and 60 percent of this so-called "Generation Y" says they’re concerned about it, according to a recent survey from PNC Bank. While many of those surveyed are taking on debt from credit cards, car loans, mortgages and other sources, education debt is the most common problem, with more than half of those surveyed saying they hold education loans.

As tuition costs continue to spiral out of control and public universities cut back on financial aid, more students and their parents are taking on loans to cover the cost of college, according to the Los Angeles Times. Americans that graduated college in 2010 owe an average of about $25,000 in student loans, according to the Project on Student Debt.

Indeed, student loan debt, now valued at over $1 trillion, surpassed credit card debt for the first time in U.S. history last August. The elevated unemployment rate, which became the norm in the past few years, has only made the situation worse, as twenty-somethings struggle to find jobs that pay enough to allow them to make headway on loan payback.

"Many of these Gen Y's have invested in college to see a return in terms of their career," Shannon Johnson, PNC's director of consumer checking and rewards told Marketplace. "Unfortunately, with the job market, they aren't seeing that as soon as they had hoped."

The student loan debt problem has gotten so severe that it could be the next "debt bomb" for the U.S. economy, according to William E. Brewer, Jr., the president of the National Association of Consumer Bankruptcy Attorneys. Brewer's organization found in a survey last month that more than 80 percent of bankruptcy attorneys saw the number of their potential clients with student debt increase "somewhat" or "significantly" in the past three to four years.

It's become a political bomb as well. Democratic Senator Dick Durbin said in a Senate Judiciary subcommittee hearing Tuesday that student borrowers should be allowed to discharge their debt in bankruptcy, according to Bloomberg. Republican presidential candidate Mitt Romney told a crowd of college students in Illinois that the best thing he could do about student debt would be to help graduates get jobs, according to MSNBC.

States With The Highest Amount Of Student Debt As Of Nov. 2011

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• New Hampshire: $31,048

• Maine: $29,983

• Iowa: $29,598

• Minnesota: $29,058

• Pennsylvania: $28,599

• Vermont: $28,391

• Ohio: $27,713

• Indiana: $27,001

• Rhode Island: $26,340

• New York: $26,271

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Comments

[ArchStanton400]

07:59 PM on 09/20/2012

45K..? My 20-something son graduated with a BSME. That was 2 Years ago. He's got a debt load of $94K. All he's been able to land are part-time jobs and most of them not even in his field. Right now he's looking a relocating to ND or PA for jobs related to the booming but enviornmentally irresponsible Fracking Gas Industry. Pretty effed'up this economy is indeed.

[greenstraws]

02:01 AM on 06/30/2012

Thousands of dollars worth of U.S. student loan debt is one of the major problems facing those in the 20-something category.

[ArchStanton400]

08:01 PM on 09/20/2012

More like tens-of-thousands, and the more advanced your Degree the greater the debt load. Used to be the first 5-8 Years with a Degree you could pay off your student Loans. Not any more. Those days are gone.

[greenstraws]

08:29 PM on 09/21/2012

thousands, tens of thousands, hundreds of thousands, and on-and-on it goes...

[livingdangerously]

05:57 PM on 06/10/2012

Student loan interest rates are usuary. Where can anyone get a guaranteed 8% return on investment, yet the the SL interest rates can go even higher?

[tips8533]

04:08 PM on 05/07/2012

i'm quite concerned i will be poor the rest of my life and i've even paid off my student loans completely...

[Mark Mark]

03:45 PM on 04/06/2012

I make $12 an hour. Have my own place in Chicago, and have saved $7,000 in the last six month. You can live very cheap if you want. These people just don't want to pay down their debt. They want iPads and iPhone and Netflix and huge flats. No you pay down your debt, you ride the bus, you go to the library and get a landline.

[hungryblackcat]

10:10 AM on 04/17/2012

I've very curious how you managed to save that much money in such a short time. I mean are you living in with 6 people in a 2 room apartment? My husband makes $10 an hour and our rent takes up half of his paycheck (we live in a city too). Then there's $200 for the electric bill, $300 for his car to get to work (bus doesn't come anywhere near our apartment), $150 for health insurance, $150 for groceries for 2 people (a month!)- we only eat rice and potatoes. At the end of the month there's nothing left. We actually have a monthly panic because we are so close to not paying everything. I'm sure if I wasn't completely disabled and only living off his paycheck I could start paying my student loans. We don't have netflix, an iphone or a flat screen. We can't afford a phone. All of our furniture is 30+ years old and hand-me-down. We live off $100 walmart mattress off the floor. We don't buy clothes at all. We haven't seen a movie in a theater in 5 years. We don't use credit cards period. When our friends ask us out to dinner or to play laser tag, the answer is always no. They have given up on asking us to do anything fun and exciting. So we have no social life.

I just have no idea how that is even remotely possible to save that much money.

[ILoveGreatDanes]

12:25 PM on 04/26/2012

This person didn't mention they had any student loan debt. They probably don't.

[xthelucky13x]

12:16 AM on 07/29/2012

this person is obviously one of those people who thinks they're poor, but has never actually been close to poor.

[xthelucky13x]

12:14 AM on 07/29/2012

I don't live in a big city like you do, so I don't know how you "have your own place in chicago" yet still claim to be living cheap. Having your own place in a big city is usually not living cheap. as for phones, I would end up paying just as much on a landline anyway, considering my phone that i currently have doesn't charge by the minute for making long distance calls. which i'd need to do to speak to my family. i don't eat very much, because i have a small appetite. i dont buy many things. yet i am still having trouble paying back my debt. My debt costs more than rent every month. Every time i have money saved up, i have to spend it all on something like a car inspection. btw..$12 an hour is more money than a lot of people make.

[BluePhantom2]

05:01 PM on 03/26/2012

A sheep skin is not a job promise. To many are showing up in the work force wondering why they are not in charge. Trade schools are the right answer as everybody does not need a degree. I got mine in my 30s so took it a bit t a time and with a specific job in mind.

[ILoveGreatDanes]

12:32 PM on 04/26/2012

Exactly. Also, college grads nowadays don't understand that flooding the market impacts demand. If employers have millions of college graduates to choose from, merely being a college graduate doesn't make a person stand out from the pack. Employers want people with specialized skills, not a degree in sitting in lecture halls and filling in Scantron bubbles. My husband blew off college completely, went to trade school to learn how to fix airplanes, and did that for a while. When he got tired of doing that, he fixed 18 wheelers. Then he went into his father's field, which didn't require college. Last year he made 60K, and he even got a new job and a couple of promotions during the recession. We were very grateful.

[psychophil]

07:30 PM on 03/25/2012

It's amazing to me that anyone before my generation ever had to struggle financially. College used to be cheap and a guaranteed ticket to a job. Now it's an expensive necessity to compete with 1000s of other applicants that have the same thing and usually much more experience. Everything is more expensive - rent is higher, food is higher, gas is higher. What exactly did the Boomers spend all their money on when they were this young?

[johan0945]

11:24 AM on 03/28/2012

Nice Post

[StarSongs]

02:35 PM on 04/26/2012

I imagine they spent it on houses, weddings and children, the things all of us student loan indebted 20-somethings are putting off while we try to pay off all of this debt.

[ratiocinate]

11:09 AM on 03/25/2012

Why aren't more people sending their kids to trade schools? At less than half the expense and only 18-24 months to graduate. I sent both my children to trade school and both are doing very well now. They found jobs within a month of graduating & paid off their debts in under 5 yrs. They add more classes little by little to expand their trade knowledge. Why do people think that they have to go to school for a straight 4 years, have this huge debt, only to find that there are tens of thousands of people with liberal arts degrees and can't find work.

When was the last time you found a good repair man for TV's, or shoes or even a qualified masonry? What happened to American that we decided a skilled trade was no longer a need?

Think about it, the guy that takes care of the local cemetery is old, owns two homes and sent 4 kids to college. He told me he would retire but there was no one who was interested in taking over...why? Have we made our kids think that they need some office job that pays $100,000+ or they can live?

I maintain that if your roof doesn't leak, the bills are paid and there is food in the cupboard, it's all good. You are making a living, you have time for your family and friends. What more do you actually need?

[mozartmaid2]

03:49 PM on 04/06/2012

Trade skills have been mostly outsourced. Or if not, people rely on the big box stores to get services, and less on mom and pop operations. Add to that, the Republicans expect everyone to somehow become Wall St millionaires...

[Yellowbird]

11:32 AM on 03/24/2012

One would think that if in a court of bankruptcy law that upon hearing that the debt of a person (not a corporation) was caused by events that were not within his ability to predict or control, that any and all debt can be discharged. At this time there is no debt discharge, there is only lifetime debt of the sort that Charles Dickens wrote about. Anyone who does not see America in decline over this issue is not educated.

A "consumer" formula for our economy can not work if nobody has money. Or haven't you noticed?

[rivetz]

08:47 PM on 03/23/2012

"Young people are completely out of touch with the realities of working America" - Old people completely out of touch with the realities of working America

[Yellowbird]

11:36 AM on 03/24/2012

Yeah right. Like ole people never worked a day in their lives so they don't know what it's like to work. Oh I forgot. Old people don't retire anymore in 2012. They work until they drop dead because their pensions were stolen from them and social security is not enough to live on and their houses are all mortgaged to the hilt for their kid's college. Yeah. Older Americans have given nothing to the nation. It's the thirty somethings with their off road toys, expensive cars, expensive homes, constant vacations and shopping that are the ones that know all about America.

But let's not become divided and jealous over what this person has that that person has not. That's so.... petty.

[rivetz]

03:30 PM on 03/25/2012

Given the relentless stereotyping of the 99% (or the 47%, if you prefer), I think it's only fair that that door swing both ways.

[JPHR]

06:17 PM on 03/22/2012

Most western countries subsidize students. As a of the extreme income and wealth inequality taxation is too low to subsidize students in the US at a comparable level. That is limiting access to education. The USA will have to confront the consequence of this approach wasting a lot of talent which simply couldn't afford or didn't want the financial risk. Guess that the saying still applies:"If you think education is expensive try doing without it". Short sighted stupidity may be killing of USA's innovative power.

[Jerry Bourbon]

04:43 PM on 03/23/2012

EVERY state in the US subsidizes college education. I hope you do not believe that, for example, the real cost of a junior college in California is the $28 a credit that the State charges.

[Matthew Minard]

02:45 AM on 04/13/2012

I live in North Carolina and it's over $250 buck a class here... and that is for community college. You have no clue how much books cost either......

[rixback]

12:02 PM on 04/04/2012

Subsidation only drives up the cost of education, making the universities richer at the consumer's expense. If financial aid and loans weren't so easy to get, tuition wouldn't have risen so rapidly.

Most degrees are not productive anyway, they are just a way to extract money from parents, taxpayers, and students. We still have a shortage of engineering talent but a surplus of lawyers and psychology majors. Picking the right degree makes a big difference in post college achievement.

[livingdangerously]

05:44 PM on 06/10/2012

I would add....picking the right school. Why do you think the Chinese and Indians do everything possible to get their kid into Harvard? It's the CONNECTIONS you meet at VE RE TAS that will land you a fortuituous position.

[castlemike]

05:25 PM on 03/22/2012

http://market-ticker.org/akcs-www?post=203759

Housing Recovery? Economic Recovery? Forget It

Forget it folks.

When you add all this together with the demographic problems we have, you've got the ingredients for a disaster -

The amount Americans owe on student loans is far higher than earlier estimates and could lead some consumers to postpone buying homes, potentially slowing the housing recovery, U.S. officials said Wednesday.

Total student debt outstanding appears to have surpassed $1 trillion late last year, said officials at the Consumer Financial Protection Bureau, a federal agency created in the wake of the financial crisis. That would be roughly 16% higher than an estimate earlier this year by the Federal Reserve Bank of New York.

This is going to destroy retirements and those who currently own homes. You're finished folks.

Here's the problem -- we have a demographics issue, as everyone who has paid attention knows. That is, there are fewer young people compared to old, which leads to pressures on things like Medicare and Social Security.

But the traditional path is for older people to downsize their economic lives. They sell their big house and buy a smaller one, or live in an apartment.

To sell it someone has to have money to buy it. Who is that going to be?

It's not going to be the young adults now in college because we have s------ them by saddling them with this debt. They thus cannot qualify for a loan to buy your house!

[rixback]

12:04 PM on 04/04/2012

Maybe the universities will will buy them for student housing. They need to keep the education bubble inflated.

[ECJIM 3ABTPA BONHA]

05:17 PM on 03/22/2012

You can keep the degree and the debt...I'll take my chances....Waiting for the day when working at the "Dollar-Hut" down the street will require a Masters degree which I believe is coming sooner then later.

[MansfieldX]

04:46 PM on 03/22/2012

Educational loans should only be available for those careers that we need as a country. No more fluffy degrees please.

[minto]

06:38 PM on 03/22/2012

Who gets to decide what is a fluffy degree?

[MansfieldX]

06:43 PM on 03/22/2012

The economy.

[demilieu]

04:05 PM on 03/22/2012

When loans are 20 or so years old and the original principle has been already paid off with interest, but graduates are still paying on them due to hardship, there should be some type of review process to maybe reduce the debt. In the name of fairness, student loans should operate at a plane above payday and car title loans.