Most Georgia parents support adult children financially, part one
Last week, we wrote that college graduates are one of the fastest-growing groups of bankruptcy filers in the United States. Due largely to the struggling job market, mounting college costs and student loan bills, and high credit card use among young people, college grads now make up 55 percent of bankruptcy filers in the U.S.
Because of the increasing challenges to this generation of college graduates, it should come as no surprise that over half of parents in Georgia and throughout the country now provide financial support to their adult children. According to a recent poll of 1,074 non-students between the ages of 18 and 39 and their parents, 59 percent of parents fund their adult children in some way.
Experts say that this number is not surprising. Currently, the unemployment rate among 20- to 24-year-olds is above 14 percent, and for 25- to 29-year-olds it remains above 10 percent. In addition, the average college student now borrows over $20,000 for college, which is nearly double the average amount borrowed less than 20 years ago.
Of the parents surveyed, 50 percent reported that they help their adult children with housing, and 48 percent said they help with living expenses. In addition, 35 percent and 28 percent offer help with insurance and medical bills, respectively. In return, three-fourths of children surveyed said that they contribute to the household finances, whether through buying groceries, paying utility bills, or contributing to the mortgage or rent. Over 40 percent of children also stated that they help out around the house in non-financial ways, such as by cleaning, cooking, or caring for children or other relatives.
While it is certainly understandable that parents want to help their struggling children, it could ultimately have detrimental effects on both parties, experts say. We will examine these risks in our next blog post.
Source: Forbes, “Nearly 60% Of Parents Provide Financial Support To Adult Children,” Jenna Goudreau, 20 May 2011