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Are the young in debt too deep?

By Judy Martel · Bankrate.com
Wednesday, January 16, 2013
Posted: 5 pm ET

Americans in their late 20s and early 30s are in bigger debt than their parents and grandparents, according to a new study.

The research, from The Ohio State University, indicates that Americans born between 1980 and 1984 carry an average of $5,689 more debt than their parents did at the same age and $8,156 more than their grandparents.

Not only do younger people owe more money, they are slow in paying it off, leaving them at risk of dying in debt. The study, which was published in the Economic Inquiry journal, concludes that the reason younger people are in over their heads is that credit is easier to obtain and debt has less of a stigma than it did in the past.

"It's not really surprising to me that the young people have more debt than their parents and grandparents," says Linda Sherry, director of national priorities at Consumer Action. "In their grandparents' day, revolving credit wasn't really available as it is today, and even in their parents' time, (credit) cards were not as available."

Carrying long-term credit card debt is serious and dangerous, says Sherry, adding that younger people sometimes have more revolving debt than older cardholders because they have less income. Once they get a job that pays more, she says, they may want to pay off the cards.

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21 Comments
D
January 17, 2013 at 1:54 pm

This appears to me to be misleading. They are looking at a time span of 25 to 35 years between generations. Inflation alone could almost account for that much more debt over that time frame.

Guest
January 17, 2013 at 1:39 pm

Many people I know borrow too much for their college expense. They use the borrow money to fund their life style- expensive trips, restaurants, etc.-and they don't want to take the responsibilty of paying it back. I am sure many pay their bills but far too many does not. My sister worked hard and paid cash for her education, at a private college. She has no debt. She lived minimally while studying to become anesthetist. Despite her 4.0 GPA, she did not applied for scholarships. All the college fund was paid for by her labor...working in the ICU prior going to anesthetic school.

Barry Wilson
January 17, 2013 at 1:34 pm

Be responsible and pay off your debt! And a $25,000 house that your parents bought would be $125-175,000 or more in 2013 dollars. The article shows valid points that the "young" are immune to debt. Maybe everyone can default on their student loans, and we'll just raise taxes on the higher earners to cover that too!!

Jim
January 17, 2013 at 1:30 pm

Consumer debt alone in this country is 2.7 Trillion Dollars.... Pay off your credit cards!!

Richard
January 17, 2013 at 1:24 pm

Romney lost for a reason...Time to move on...We go down divided....Time to come together!

ddw
January 17, 2013 at 1:21 pm

Romney lost for a reason....I agree college is out of control... But if we stay divided things can only get worse....time to come together!!

Rob
January 17, 2013 at 1:16 pm

hmmm. my parents paid like $25,000 for a house..my grandparents paid like $4,000 for their house..................perhaps we can see whether these debt totals include mortgages..or perhaps student loans? without the numbers to consider it is easy for older generations to cast stones at the newer generation.

SMW
January 17, 2013 at 1:15 pm

Well duh!!! Look at the cost of a college education these days. The cost of college is way out of control. This generation is paying $80k+ for college to get jobs that start at $30k if they are lucky. Plus the Government isn't helping the students or their parents finance the cost of the education. The current rate on a parent plus loan is 7.96%. With this President and Congress things are going to Hell and are only going to get worse.

Richard
January 17, 2013 at 1:12 pm

Im sure its all Obamas Fault....Get real!!

Barry Wilson
January 17, 2013 at 12:58 pm

It's no wonder that the same generation, falling into debt without a care in the world, would support Obama, who will rack up more debt than anyone could ever imagine. It is a terrible track to be going down, unfortunately the train won't stop on it's own.