A portrait of America’s young adults: More debt burdened and financially dependent on their parents

Young adults in the U.S. are experiencing a very different trajectory than their parents, with more of them hitting key milestones later in life and also taking on more debt, according to a new report from the Pew Research Center.

A majority of young adults say they remain financially dependent on their parents to some extent, such as receiving help paying for everything from rent to their mobile phone bills. Only about 45% of 18- to 34-year-olds described themselves as completely financially independent from their parents, the study found. 

Not surprisingly, the younger members of the group, those 18 to 24, are the most likely to rely on their folks for financial support, with more than half relying on their parents to help take care of basic household expenses. But a significant share of 30- to 34-year-olds also need assistance, with almost 1 in 5 saying their parents provide aid for their household bills.

More broadly, the survey offers a portrait of a generation that’s struggling with debt in a way that their parents did not, with more of them shouldering student loans and, for those who own a home, larger mortgages than their parents had at their age. But the analysis also showed that young adults expressed optimism about their futures, with 3 in 4 who are currently financially dependent on their parents saying they believe they’ll eventually reach independence. 

“We were just very aware of this narrative that’s out there that parents today are too involved and it’s holding young adults back from becoming independent, and we wanted to learn more about the dynamics,” said Kim Parker, director of social trends at Pew. “Most parents think they did a good job [preparing their children for adulthood], but everyone agrees that young adults aren’t completely financially independent.”

But, she added, “There’s both an acknowledgement of the assistance and a sense of optimism about the future.”

The findings derive from two surveys: The first polled more than 3,000 adults with at least one child between 18 and 34 with whom they have contact, while the second survey included about 1,500 adults 18 to 34 with at least one living parent with whom they have contact.

More debt than their parents

The Pew analysis also looked at other financial yardsticks to gauge generational differences. Young adults, who straddle the Gen Z and millennial generations, are more likely to have college educations than their parents. For instance, 40% of adults between 25 and 29 have a college degree today, compared with 24% of the same age group in 1993. 

Having a college degree is linked with higher lifetime earnings, as well as other financial benefits, yet it also comes with a downside: More young adults have student loans than their parents did at the same age, the analysis found. About 43% of people between 25 and 29 have student debt today, up sharply from 28% in 1993. 

Young adults who own their homes also are taking on more mortgage debt, the study found. Homeowners ages 29 to 34 have about $190,000 in mortgage debt today, versus $120,000 in 1993, when adjusted for inflation.

Living at home

Mounting debt and other financial challenges may be why more young adults are living at home compared with a generation ago, according to Pew. Social attitudes have also changed, with less stigma attached to remaining at home. The study found that about 57% of those 18 to 24 are living with their parents, compared with 53% in 1993.

“The cost of housing and rent looms over a lot of this,” Parker noted. “The arrangement a lot of adults have with living with parents has become much more acceptable than in prior generations.”

Young adult Americans are also delaying key milestones, such as getting married and having children, the analysis found. In 1993, about 63% of 30- to 34-year-olds were married; today, that share has dropped to 51%. 

The drop in child-rearing is even more extreme, with about 60% of 30- to 34-year-olds in 1993 having at least one child. Today, that’s plunged to 27%. 

“It’s a relatively big change over a short period of time,” Parker said. “It all suggests a kind of delay.”

The cause could be financial, of course — children are expensive, with one recent analysis finding that raising a child from birth to age 18 now costs an average of $237,482. But it could also be cultural, Parker noted. A separate Pew study found that a growing share of Americans don’t expect to have children.