Is Student Debt Crisis Driving Young Adults Back Home?

Young adults’ risk of “boomeranging,” or returning to their parents’ home, is more closely tied to dropping out of college rather than the burden of student loan debt, as many people believe, according to a new study at Dartmouth University.

But researchers did find a link between boomeranging and student loan debt in young black people.

Overall, the findings show how the “boomeranging” trend is more closely tied to a college completion crisis rather than student debt. It also demonstrates how the burden of student debt is “uniquely racialized” and how racial disparities in student loans among young adults may be further perpetuating racial inequalities in the transition to adulthood.

But overall, even though student loan debt has reached an all-time high — with the average college graduate owing about $30,000 — the researchers found that boomerangers tend to have less student loan debt than young adults who don’t return home.

Rather, there was a much stronger association between boomeranging and college completion rates. Particularly, young adults who do not finish their two- or four-year college degrees have at least a 40 percent greater risk of returning home than those who graduate, perhaps due to limited options in finding a job without a degree.

“Our study provides an important corrective to the popular narrative that the student debt crisis is leading a generation of young people back to their parents’ doorstep,” said Dr. Jason N. Houle, assistant professor of sociology at Dartmouth.

“On the one hand, it looks like college completion — much more so than student debt — is a stronger determinant of returning home among young people. But on the other hand, the burden of student debt falls disproportionately on racial minorities, which raises important concerns about how student debt may help some groups of young people but hurt others across racial lines.”

The researchers did find that student debt was linked to a greater risk of boomeranging among black youth. Black college-goers who take on debt are more likely to boomerang — a 10 percent increase in student debt was found to coincide with a 20 percent increase in the risk of returning to a parental home among blacks in comparison to virtually no effect for whites.

The researchers suggest that this may be because student debt is more burdensome and harder to repay across racial lines. Young black people tend to have less access to fair credit than their white counterparts, and are more likely to have private loans, which are characterized by high-interest rates, and steep deferment and forbearance fees.

Furthermore, young blacks are more likely to experience discrimination in both college and the labor market than whites, where they may be steered toward for-profit colleges with low attrition rates and face fewer job options later, all of which create an economic strain making it more difficult to pay off loans.

In addition, young adults who have successfully transitioned into adult roles, such as those who are cohabiting or are married, or are homeowners, as well as those who have found success in the labor market, are less likely to move back in with their parent(s).

The study is published in the journal Sociology of Education.

Source: Dartmouth College