A new study by eHealthInsurance finds that recent college graduates are in for a reverse sticker sock when they see potential earnings for their chosen career field. Their expected income is much less than they thought and that’s if they are one of the “lucky” two-third‘s of those surveyed to even find a job.
With student debt surpassing credit-card debt as a consumers’ biggest liability, 2012 graduates earning less than expected are opting to hang at their childhood home a little longer.
According to another study of recent college graduates conducted by researchers at Rutgers University 40 percent of the participants had delayed making a major purchase, like a home or car, because of college debt, while slightly more than a quarter had put off continuing their education or had moved in with relatives to save money.
These studies show both recent grads and their parents had expectations of a college education for a better future and instead have found themselves in need of debt help before they even get started.
More than $1 trillion in student loans are outstanding in this country. The president is pushing for Congress to extend the low interest rate on federal student loans, but if they fail to act the interest rate on the loans, which are taken out by nearly eight million students each year, will double on July 1, to 6.8 percent.
A scary proposition for recent grads and their parents who will in many cases continue to support them financially.
Starry eyed with dreams of saving the world and making the big bucks these grads are forced to take jobs outside of their field just to pay the bills and often working several jobs to pay down the debt they accumulated during their college years.
Making it Work
As the kids make their way back to the nest make sure you are ready. Creating a contract that outlines the roles and responsibilities for all the adults in the household is a great way to set expectations and boundaries as well as a timeline for moving on.
Here are four tips for creating an environment that works:
- Establish ground rules. Formalize the rules so everyone is clear on the expectations.
- Make them contribute. Yes they are there because they can’t afford to live on their own but that doesn’t mean they should stay with you for free. Come up with a figure that fits their budget and is enough to cover the additional expenses; utilities, food, etc. of them being there.
- Let them pull their weight. Just because they are moving from the dorm back home does not mean that you are again responsible for their meals and laundry—they can fend for themselves, they did just fine the four years they were away from you.
- Set a deadline for them to leave: Though it may sound harsh, setting a time limit ahead of time helps keep everyone focused on the fact that eventually they need to establish their independence.
Times are tough for today’s graduates, soaring student debt levels, high unemployment, and rising prices are making the “real world” seem impossible for them to enter. Help them where you can but make it clear that they need to develop independence, or they just may still be around when it’s time for you to enjoy retirement.
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