Like so many young Americans, Derek Wetherell is stuck.
At 23 years old, he has a job, but not a career, and little prospect for advancement. He has tens of thousands of dollars in student debt, but no college degree. He says he is more likely to move back in with his parents than to buy a home, and he doesn't know what he will do if his car—a 2001 Chrysler Sebring with well over 100,000 miles—breaks down.
"I'm kind of spinning my wheels," Mr. Wetherell says. "We can wishfully think that eventually it's going to get better, but we don't really know, and that doesn't really help us now."
Mr. Wetherell is a member of a lost generation, a group that is only now beginning to gain attention of many economists and employment experts. From Oakland to Orlando—and across the ocean in Birmingham and Barcelona—young people have come of age amid the most prolonged period of economic distress since the Great Depression. [...]
Moreover, many college graduates face an added challenge that was far less common in earlier generations: mountains of student debt. Even as mortgage and consumer debt plunged in the wake of the financial crisis, student loan balances nearly tripled from 2004 to 2012, to roughly $1 trillion, according to a recent study by the Federal Reserve Bank of New York. More than 40% of 25-year-olds now hold at least some student debt. The average borrower owes roughly $25,000.
The rising level of student debt, especially during a period of poor job opportunities, is likely to have long-term consequences. A recent study from the left-leaning think tank Demos estimated that $53,000 in student debt—the average debt burden for a household with two college graduates—will reduce lifetime wealth by more than $200,000. Robert Hiltonsmith, the study's author, said high debt levels are making it harder for graduates to advance in their careers by changing jobs, moving to a different city or accepting internships that can open up career opportunities down the road.
Read the full report: At What Cost? How Student Debt Reduces Lifetime Wealth