Share of Young Americans With Debt at Lowest Level Since 1983

According to Pew Research Center, although young adults took a hit in the recession, many actually managed to decrease their debt from 2007 to 2010. In 2007, among those under the age of 35, their debt totaled $21,912. But in 2010 the median debt level of young adults fell to $15,473 which is a 29% decline in just 3 years. It was estimated that older adults owed more than younger adults and unfortunately, their decline in debt was modest compared to young adults. Older adults were $32,543 in debt as of 2007 but they did manage to pay off some of their debt. This brought their median total debt level to $30,070 in 2010 which is only a 8% decline in debt.

Today's young adults also did a better job of paying off their debt during the recession than young adults in other time periods. The Pew Research Center estimates that in 2010 78% of households headed by a young adult held any debt. Although this figure may seem high, this actually marks the lowest level of young debt holders since 1983 when this data first started being collected by the government.

Although this news is certainly welcome to those who worry about high debt ratios among young Americans, it is important to examine why they have less debt. For one, part of this decline is due simply to the fact that fewer young Americans own homes or carry credit card balances. For instance, in 2007 it was estimated that 48% of young Americans had credit card debt compared to 39% of young adults in 2010. Moreover, although the total median debt level may have been lower in 2010, the proportion of households carrying student debt rose dramatically. In 2001, only 26% of younger households had student loan debt compared to 40% in 2010, marking a 14% increase in less than a decade.

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