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Most people will tell you that higher levels of student debt are pushing more young adults to move back in with mom and dad. But new research suggests that’s not the case for everyone.
Overall, young adults who move back in with their parents actually have less student debt than those who don’t, according to a study published this month in the journal, Sociology of Education. On average, young adults with student loans who move back in with their parents have about $14,500 in debt, according to the study, which is gleaned from the National Longitudinal Survey of Youth, a Bureau of Labor Statistics data set. Young adults with student debt who never return home have $18,420 on average, the study found.
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The findings come amid growing angst of the role student debt plays in young people’s transition to adulthood. Living with parents became the most common living arrangement among 18- to 34-year-olds for the first time last year, according to the Pew Research Center. At the same time student debt has become an increasingly common experience among young adults.
But the relationship between having debt and the decision to move home varies significantly by race. For black young adults, a 10% increase in debt is associated with a 20% boost in the risk they’ll return to mom and dad’s, but an equivalent increase in debt among their white peers doesn’t result in a similar increase the chance they return home, the study found .
“If student debt is a crisis, it certainly is a crisis for those who are the most vulnerable,” said Jason Houle, a sociology professor at Dartmouth College and one of the authors of the study.
The research adds to the growing body of evidence that student debt may be contributing to widening racial inequality. Because black households have less wealth on average than white households, black students are more likely to take on debt and when they do, they tend to borrow more. They’re also more likely to struggle to pay back those debts.
The reasons why are varied. For one, black students are more likely to attend for-profit colleges which on average have poorer outcomes. In addition, black students often cluster in lower paying majors, in part because they’re more likely attend schools with fewer resources that high-paying majors, like engineering or technology-related pursuits, require.
But even when black students attend the same schools and major in the same discipline as their white peers, they’re more likely to struggle in the job market, compounding their challenges with student debt. Young black college graduates were unemployed at a rate of 9.4% compared with just 4.7% of their white peers, according to an April analysis from the Economic Policy Institute, a left-leaning think tank.
“We know that there’s discrimination in the labor market,” Houle said.
Though student debt ups the risk of black young adults moving back home, a stronger predictor of so-called boomeranging for young adults overall is whether a student completed his or her degree. That dovetails with other research indicating that student loan borrowers with small balances actually struggle the most with their debt because they didn’t earn the degree that would provide them the premium in the labor market that could help them pay it off.
“We live in a world where going to college has always been a risky proposition, but now it seems riskier than it’s ever been,” Houle said.