Live at Home to Pay off College Debt

Posted on Feb 18th, 2015 | Budgeting, Credit, Debt

At some point during college you may have pictured yourself graduating, snagging a job and moving into a fabulous apartment where you’d be free to continue the independent lifestyle to which you’ve grown accustomed. But if you’re now among the scores of recent college grads who find they are moving into their childhood bedroom rather than their dream apartment, take comfort in the fact that you’re not alone.

The Cost of College
With jobs these days being tricky to come by and college costs skyrocketing at an unsettling rate, it’s not unusual for recent grads to find themselves moving back in with their parents. In fact, it seems like many Millennials are actually embracing this trend rather than running from it. For those who ended their college careers in 2014, the average loan amount upon graduation was a staggering
$33,000. It’s no wonder then that according to a 2012 recent Pew Research study, 36 percent of young adults aged 18-31 were living at home — a whopping 21.6 million in total. Additional data indicates that 53 percent of 18-24-year-olds live at home. Back in 1980 only one out of every 10 college grads moved back home. Today, four in 10 take that route.

Clearly, the job market has a lot of catching up to do to support the rising cost of getting a college education. In 2012, only 63 percent of 18-31-year-olds had jobs, whereas five years earlier, despite a shaky economy, 70 percent of adults aged 18-31 were employed. For many, college debt simply isn’t a choice as many employers won’t even consider candidates without college degrees. Even those who choose vocational schools over universities are often forced to foot the bill.

The Bright Side
But here’s the good news: If you do wind up moving back home after college, once you land your first job, you’ll be in a great position to start chipping away at that debt. Think about all the things you won’t have to pay for on your own from rent and utilities to groceries and household supplies (though you should offer to chip in for food and toiletries, there’s a good chance your parents won’t take you up on it). All that money can instead go toward your student loans, and the more quickly you pay them off, the less interest you’ll end up paying over time.

Of course, living at home can present some challenges, but there are things you can do to make it a pleasant experience for both you and your parents. First, remember that your new living arrangement may be difficult for your folks as well as they’ll need to adjust to having you as their roommate. Not only that, but having you live at home is going to cost them money. Sure, their mortgage won’t go up and the incremental cost of water and electricity to accommodate another person won’t be significant, but they’ll most likely be feeding you and springing for extras to make your stay more enjoyable. Make sure to show your appreciation by helping out around the house or at the very least singing their praises frequently. Also, be certain to set boundaries and expectations from the get-go. Establish a protocol for when you’ll be staying out late and decide whether your parents should automatically expect you for dinner on weeknights. Finally, make sure all the bedroom doors have locks — and agree that everyone, your parents included, will use them, consistently, as needed.

 Photo by CJ Sorg via cc.