FOR IMMEDIATE RELEASE:
April 19, 2018
Contact: Paydon Miller
Paydon.Miller | (202) 734-6536
New Report: For the First Time, Young Adults with Student Debt have Negative Net Wealth
Updated report from Young Invincibles shows that despite recent economic growth, young people continue to fall behind in indicators of financial security compared to Baby Boomers, particularly among African Americans.
Washington, D.C. – Today, Young Invincibles released an update to their report, The Financial Health of Young America: Measuring Generational Declines Between Baby Boomers & Millennials. This report is based on a cross-generational analysis of the financial security of Millennials today compared to Boomers when they were young adults. The update adds to this body of research by analyzing the continued economic challenges facing young adults between 2013 and 2016.
Despite overall growth in the economy during this three year period, the update shows that Millennials have not reaped the same benefits as the economy at large. Young adults still earn significantly lower incomes, own homes at lower rates, and have a dramatically lower net wealth than young adults 25 years ago.
The report update shows new, concerning trends for Millennials, including:
- For the first time, young adults who graduated college with student debt have negative net wealth. Today’s young adults with student debt have a median net wealth of -$1,900. That’s down from a median net wealth of $9,000 in 2013.
- Homeownership among young people continues to trend downward. A primary means for families to build and transfer wealth, homeownership among young people dipped by 3 percent. This trend is entirely driven by college graduates with student debt, as the rate of homeownership for young people with degrees but no debt, as well as those with no degree, remained stable.
- This financial decline has been especially devastating for young African Americans, regardless of student debt. Between 2013 and 2016, homeownership among all young African Americans declined 6 percent, median net wealth has dropped nearly 19 percent, and the retirement saving rate also declined.
“This latest update adds an important layer to our existing analysis on the financial decline of young people compared to their parents’ generation,” said Tom Allison, author of the report update and Deputy Policy & Research Director for Young Invincibles. “This newly-available data shows that despite overall economic growth between 2013 and 2016, which brought lower unemployment and growing GDP, this generation of young people is still being left behind. Student debt is a unique and growing burden on young people’s ability to achieve long-term financial stability. As the most diverse generation in our nation’s history, today’s young people need policies that also address the widening wealth gap and advance equity and mobility.”
“After graduating, I was excited to begin a career in graphic design,” said Megan Chandler, a recent graduate working in Charlottesville, Virginia. “Despite a good job in my field, student loan debt impacts every decision I make. Affording my monthly payments holds me back from accomplishing my financial goals like owning a home. I’m extremely grateful for my education, but too many students struggle for too many years with this kind of financial instability.”
In 2013, the median net wealth for a young person with student debt was around $9,000. That number has dropped to -$1,900 today – the first time in history that those with student debt have fewer assets than they have debt, resulting in negative net wealth.