03/21/2012 03:24 pm ET Updated May 21, 2012

The New Quarter-Life Crisis

Now that the recession has retreated just a bit from American shores, we're being allowed to take a better look at its aftermath. To be frank, it's not pretty, especially for millennials and their parents. Many of the latter co-signed on student loans and must cope with the loss of a nest egg, not to mention a grown child or two who has boomeranged home for an indefinite stay.

Many of us who have college-age children in our household are scared to death that we might have roommates for years to come, as they face the great truth about the cost of that education when the loans become due a few scant months after graduation. Just last week I had lunch with a significant educator who talked of her son and daughter-in-law moving in with her so that they could re-pay her daughter-in-law's mountain of school-related bills. To hear a great teacher question the wisdom of the expense involved in training someone who is also likely to be a great teacher reinforced my angst that we don't have the cost -- or value -- of a college education figured out.

In 2008, I predicted that the then-nascent subprime mortgage crisis would spawn a student loan crisis of similar proportions. Indeed, it has: A new study from the National Association of Consumer Bankruptcy Attorneys says the student loan "debt bomb" has the potential to be just as horrific as the mortgage crisis and reports that in 2010 student borrowing totaled more than $100 billion for the first time, and total outstanding loans exceeded $1 trillion in 2011, also for the first time.

At a small breakfast recently, I asked our U.S. senator, Richard Blumenthal, what the federal government has planned to help solve this brave new crisis. He candidly answered that the administration had not yet announced its plan. A few weeks later, President Obama seemed to start to tackle student loans, but just like with the housing crisis, who knows who benefits and how. In these early days, there's still fear and loathing of the day when student-ing ends and re-paying kicks in. How can anyone repay four years of tuition, room and board on a teacher's salary? (Not to mention on the wages of a McJob, as low-paying work was coined years ago, when Generation Xers couldn't find their way into the professional fast lane.)

Debt of such staggering proportions has quite literally paralyzed millennials (categorized as people aged 18 to 29). One in four lives with his or her parents, and nearly 16 percent are unemployed -- twice the national average and the highest for this group since the U.S. Department of Labor started keeping records. And yet, all these uncomfortably large statistics still don't paint the entire picture, because millions of young people have delayed entering the workforce by staying in school, taking non-paying internships or seasonal work, joining AmeriCorps or treading water in other vastly creative ways.

I must say here that I don't entirely understand the rote American sequence of high school then college then work for 40-plus years with no breaks. Why rush? But not following this structure today is affecting us all. With unspeakable debt and no job prospects, millennials are putting their lives on hold, delaying high-impact life events such as buying a home and car, getting married and starting a family, saving for retirement and returning to school for further education -- you know, all the sorts of things that galvanize our economy.

It's been particularly unhelpful that the price of public colleges has risen 6 percent a year over the last decade. Millennials make about 90 cents for each dollar their fathers earned at their age but are saddled with twice the student loan debt that college graduates were just a decade ago. This means more potential college students are "taking a year off" because their families can't borrow against their home equity for tuition as they once might have been able to. Still others are questioning whether college is worth the headache at all -- like the Yale graduate recently profiled in The Washington Times who, since graduating with a master's in fine arts, has waited tables, pedaled a pedicab and now works at a photo lab for nine dollars an hour.

Since my prediction more than three years ago, I've been certain that an overabundance of American optimism did as much to get us into this mess as it will take to get us out. We can't forget that before the recession, rising home equity and easy credit enabled many families to blithely and naively seek the educations they desired. It was a big, fake, shiny bubble. Until, with a pop heard round the world, it splattered all over the younger generation -- the generation perhaps least prepared to endure it.

On the worst days, I see millennials' disappointment and frustration give way to a stampede of panic that they're in danger of becoming chronically, even permanently, unemployed. But in general I'm astonished at how optimistic millennials -- all Americans, really -- remain in spite of so many crippling setbacks. More than three-quarters of young people say they still believe the American dream is within reach for themselves, though the dream has been officially, painfully, deferred. Most also continue to uphold the value of a good education, as they should -- labor statistics show that unemployment remains highest among people without college degrees.

The halcyon days of education (basically anytime pre-2007) were governed by the dear old golden rule that hard work and investment paid off in the form of a lasting and lucrative career. Today there are no rules, although I do think the best weapon a college graduate now has is a very old-fashioned, sleeves-rolled-up work ethic. When Euro RSCG Worldwide, the parent company of my public relations agency, surveyed millennials last year, we found their job prospects hampered simultaneously by the desire for a lenient work-life balance and an expectation that they'd rise rapidly in their careers. I saw then that millennials don't know how to overcome the recession because they don't understand why it's affecting them. They want to climb the corporate ladder without breaking a sweat.

Is this because they were helicopter-parented by Baby Boomers? I definitely don't think that kind of coddling did them any favors. Just one example is that instead of looking critically at which majors are leading to profitable entry-level jobs and choosing accordingly, millennials are majoring in whatever they desire. The wise young person might want to set his or her fancies aside, at least for the present, and major in one of the STEM (science, technology, engineering and math) fields, steering especially clear of architecture, humanities and arts degrees. Or better still, astute millennials might postpone college for a few years, to get work experience, then head to campus fully aware of how they can use the luxury of an education to make themselves better -- better people as well as better wage-earners.

Millennials, take heed: With an economic ecosystem as off-kilter as this one, it's just as important to enter college with a game plan as it is to graduate with one. No pressure or anything, but your future hangs on it. All our futures do.