A typical young U.S. household—defined as one led by someone under age 35—had $15,000 in total debt in 2010, down from $18,000 in 2001 and the lowest since 1995, according to a recent Pew Research Center report and government data.In addition, fewer young adults carried credit-card balances and 22% didn’t have any debt at all in 2010—the most since government tracking began in 1983.
On the face of it, the low overall debt levels seem like good news. Nobody wants the next generation to be crushed under a massive debt burden. But total debt also includes things like mortgages and car loans, which means more and more young people are putting off purchases of cars and homes. And while it’s good that Millenials are spending smarter, it also means that it’s taking them longer to transition to adulthood. All things considered, if today’s youth are going to have some debt (and they will), we would rather they take out a mortgage and start a family than live at home and pay off student loans for the next 30 years.It does a society no good when its younger members delay putting down roots because of decisions made when they were children. And student debt, which is one of the few types of debt that is not dischargeable through bankruptcy, is the anchor that is holding our nation’s young in place.