Returning Home after College: A Growing Trend or a Necessary Move?
This article examines the economic and cultural factors influencing the rise in multigenerational living among college graduates.
By Heather Rech — March 27, 2023
Despite the long-term payouts of a college education, young people today are struggling to launch into independent living. A 2021 report from The Center on Education and the Workforce at Georgetown University found that over the course of a lifetime "Bachelor degree holders earn 75% more than those with just a high school diploma." Yet 55% of college educated young people, according to studies compiled for Education Data Initiative, say that they aren't able to finance their own apartment or first home and have returned to their childhood home to save money. Each generation faces the challenge of establishing themselves in their career and personal life but are recent graduates facing additional financial burdens that make leaving home impossible? In this article we will discuss the economic and cultural factors influencing the rise in multigenerational living among college graduates. We will also consider if this might be the right move for your situation and essential steps that families can make to make the arrangement successful.
Rising Student Debt
The rise of college tuition and subsequent student debt has slowed the climb towards financial stability for recent graduates. "In the 2020-2021 academic year, the College Board found that," 51% of bachelor's degree recipients from public four-year institutions graduated with federal loans with an average federal debt level of $21,400 per borrower; 53% of bachelor's degree recipients from private nonprofit four-year institutions graduated with federal loans with an average federal debt level of $22,600."
Education Data Initiative cites that "Roughly, 40% of Generation Z say their student loan debt is delaying them from owning a home and 60% of Millennials say their student loan debt postponed them from buying a home." Additionally, the career trajectory looks very different for the incoming workforce facing job layoffs and a post pandemic work world. There is a greater emphasis on job hopping to achieve the financial stability that previous generations received from their loyal service to one company. Upcoming generations are also emphasizing different standards for their professional life and refusing to subscribe to a toxic work culture that leaves no room for their personal life. Instead they aren't afraid to look for another job or find creative solutions like moving back in with mom and dad to meet their financial needs.
Rise in Multigenerational Living
Multigenerational living has long been a part of the cultural traditions of foreign-born, Asian, Black and Hispanic Americans but it's interesting to note the highest rise of multigenerational living in recent years has been among Non-Hispanic white Americans. Pew study found that, "Non-Hispanic White Americans accounted for a higher share of the multigenerational household population growth from 2000 to 2021 (28%) than of total population growth (9%)." For a demographic that has valued independent living as an important passage into adulthood, this is a dramatic shift that could both combat current financial burdens and pose roadblocks for the rite of passage that has heavily relied on independent living. I have long observed that there are different cultural values guiding the home life of foreign-born, Asian, Black and Hispanic Americans. One of the values that stands in contrast to my own cultural framework is the normalcy of adult children living at home. Western framework often speaks negatively of grown children living at home and has associated this living situation with a failure to launch; that often assumes a failure to thrive in other areas as well like education, relationships, careers ect. In contrast many communal cultures have embraced this living as a way of life that creates financial stability for the whole family. Instead of being overly burdened with the cost of childcare, the older generation takes care of the kids, while the 2nd generation works. Once young children are raised, then the grandparents are cared for at home instead of a nursing home. The pandemic highlighted the many benefits of communal living and fostered a new appreciation for community and family as many adopted multigenerational living for the first time. Years later, how is this changing family dynamic affecting the next generation? Is the whole family reaping the financial rewards?
A Freedom to Save & Spend
Business Insider's February 2023 article, "Confessions of 20-somethings who live at home and splash out on cars, designer handbags, and nightclubs instead", offers an interesting perspective on four educated young people with professional degrees living at home for the flexibility and financial benefits. For these young people, although they are saving, the article points out that, "being back in their childhood bedrooms also gives them the freedom to splurge on designer handbags, meals at fancy restaurants, bottle service at nightclubs, cameras, and trips to Europe." For these adult children, multigenerational living doesn't appear to be centered around building financial stability for the whole family but is fueling a lifestyle of convenience and comfort with rent-worthy amounts on traveling, hobbies, and luxury goods.
Their parents would be wise to hold them to specific financial goals and a timeline as Emily Simonian, head of clinical learning for Thriveworks, suggests in Why Mom and Dad Won't Kick Adult Children Out of the House. She says, "The "live at home" scenario could also serve as a big comfort to many young adults, who fully understand and accept that this is a temporary situation. For others, however, it enabled poor behaviors that were maybe already present, like immaturity or laziness." She emphasizes that, "The outcome usually depends on how the arrangement is presented—the clearer the guidelines, expectations, and boundaries (from both sides) the better."
Setting New Expectations
It might not be necessary or feasible to move back in with your parents after college. Given the cost of living and the changing priorities of the next generation, moving back in with a plan to move out could be exactly what's needed to launch successfully into the world. The cost of an education, the crippling amount of student loan debt and changing job market requires a new approach for many new graduates to integrate successfully into society. Families that live together have the advantage of pulling resources and can better weather the economic storms to achieve financial stability for the whole family. Whether adult children are returning home to pay off debt or save for a down payment, be sure that all parties understand both the goal and time frame for living together. Talk about expectations for contributing to rent, groceries, and chores so parents don't sacrifice their own financial future or enable grown children to spend in ways that aren't financially responsible.
Heather Rech
Heather Rech started her college journey at Biola University and graduated from Liberty University in 2013 with a multidisciplinary degree in Spanish & Religion.
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