Debt DecreasingThe Great Recession ruined credit scores, lessened collective and familial wealth and sent thousands of home into foreclosure; but in the aftermath, millennials have less debt and are in better financial shape. The Pew Research Center examined the Federal Reserve Board and other government data and concluded that Generation Y shed more debt, but also own fewer homes and cars.

The report found that from 2007 to 2010, the median debt of households headed by a millennial younger than 35 decreased by 29 percent, compared to an 8 percent decline among households headed by adults 35 and older. These numbers were also spurred by a 9 percent decrease in credit card debt.

All of these statistics indicate a “broader societal shift toward delayed marriage and household formation that has been under way for decades,” according to Pew.

Other important findings include:

  • Younger households are breaking records. “The share of younger households holding debt of any kind fell to 78 percent, the lowest level since the government began collecting such data in 1983.”
  • Sallie Mae is still the devil. Younger households are burdened with more student loan debt after the recession. In 2010, households headed by someone under 35 had 40 percent student loan debt, which is up from 26 percent in 2001 and 34 percent in 2007.
  • Home ownership is in swift decline. Younger households owning their principal residence fell from 40 percent in 2007 to 34 percent in 2011.
  • Owning a car is a privilege that is accompanied with debt, plus interest. In 2007, 44 percent of younger households had vehicle debt; this has declined to 32 percent in 2010.


  1. Thanks to good financial planning this is definitely true for me.

  2. lauryn

    Sallie Mae IS the devil.

  3. Pseudonym

    The framing of this info seems misleading. Student loan debt up 14 percent since 2001, so millennials have more student debt after recession. However, being faced with a horrible job market, high unemployment, and those higher student loans, fewer millenials are able to buy homes (which would increase their debt). Those who bought homes, probably have more house debt given the fall in home prices (They probably won’t be making a profit when they sell their home in 10+ years like their parents’ generation was able to do.). So, a more fitting way to frame this info is “Millenials are not buying homes: what are the implications of continued renting vs. buying?”

    Yay for the decrease in credit card debt, but it’s probably more b/c banks started lowering credit limits for cardholders rather than the fact that millenials are more financially well off or responsible.

    • Chic Noir

      Banks have been all over the place. Lowering the limit for some. Giving people fresh out of bankruptcy court, credit cards. Wildly increasing the limits for other people who pay more than the minimum but run close to their limit.

      * shakes head*

  4. Mademoiselle

    This tells me that younger people view education as a more valuable asset than houses and cars. The catch is education actually depreciates with time. How much you know now is only as valuable as how little other people know and how long you manage to keep that advantage over than them. So the more common your knowledge becomes, the less valuable it becomes, and new knowledge will continue to cost more than old knowledge. It’s like cars (and pharmaceutical patents).

  5. Chic Noir

    I think the millennialas as a whole are eschewing debt of any kind. Are far more frugal than our parents the boomers and gen xers.

    We don’t have a problem shopping in thrift stores ESP when you can get better quality with a 2 dollar American made cotton shirt vs a 10 dollar forever21 polyester and nylon rag.

    Debt is another form of slavery and I say this as a sister who likes nice stuff. I just have about 5 different savings accounts to pay for stuff( travel, emergency, 5 percent, moving,clothes/shoes/bags).

    • Pseudonym

      Interesting b/c I don’t see this trend at all. Who doesn’t have a smartphone (and accompanying bill) these days? and how many of those people with smartphones have no savings? Yes, people go to thrift stores, but more b/c that’s the “chic” thing to do. It’s all about vintage. Again.

      I do notice a higher use of coupons, discounts, etc. but this seems to more often lead to an obsession with bargains and overbuying as people feel compelled to take advantage of every single steep discount “b/c this low of a deal is hard to come by.” So they end up with 500 shirts from the thrift store, countless Groupon meals, etc. b/c they all were a steal. and the clothing discounters (eg. Gilte Group) are definitely making tons of money. I just window shop and it even hurts my heart sometimes to let those deals slip away (but they totally come back, I’ve realized).

      Also, quality has decreased overall on all products, forcing even the most frugal to buy frequently. I recently bought a pair of Circa Joan and David heels (middle of the road, not cheap, not expensive), wore them out one or two nights, and the rubber on the heel is already wearing down b/c they’re using an extremely soft tip so the shoe won’t last as long. I’m going to a shoemaker to get hard plastic or metal taps put on, but many people would just wear them down and end up having to buy new shoes.

      The houses are the same! These new homes are being slapped up in days, people pay $250+K for a 30-year mortgage, and the building starts falling apart and needing upkeep and repairs after a few years.

      The sticker prices for these things may be lower, but the upkeep and replacement costs definitely end up to a higher cost long-term.

    • Chic Noir

      I’m begaining to believe that having a smartphone is a necessity and buying a home isn’t in the best interest of most people.

      About the eating out via Groupon coupon, major waste of money. There was a study recently that mentioned how often people under 30 versus the boomers and the greatest generation.

    • I totally agree. Affluenza affects our generation more than any other, but we don’t discuss it because of the malaise of the recession. So many (rightly) complain about their employment prospects, but also pacify themselves with an excess of cheap consumer goods. I think it’s ridiculous.

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