Generation Debt
Student Loans, Credit Cards, and Their Consequences
November 27, 2006
By EOP Staff

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Young Adult Economics Series Part 3

Debt has become a generation-defining characteristic for today's young adults. The problem often begins with student loan debt, which today affects both community college and university students. In addition, today's young adults are relying more on credit to cover basic living expenses, particularly during those first few years in the workplace. As starting salaries have failed to keep pace with rising student loan bills, housing costs or health care costs, for many young adults the credit line becomes a life line. The ensuing debt is exacerbated by a host of credit card industry practices such as universal default and penalty interest rates, which make it exceedingly difficult to pay down the debt in a timely manner. Rising debt also threatens the ability of young adults to manage the costs of day-to-day living, build assets and save for retirement, and support a family.