College grads are moving home for help from mom and dad
The student loan bailout has started — and Washington has nothing to do with the funding.
This new domestic program is being subsidized by mom and dad, according to an eye-popping new study.
It’s American parents who increasingly are picking up the steep tab for the high number of young millennials who’ve moved back home after college, often flat broke and struggling with their bills, the UBS Investor Watch report found.
And the next batch of heavy-in-debt grads are about to walk away with their degrees — straight back home.
Seventy-four percent of millennials receive financial support from their baby boomer parents right after college, UBS found.
And the vast majority of their parents — 80 percent — are pleased to provide it.
UBS polled clients with at least $1 million in investable assets each; 479 had at least $5 million. Studies of the less affluent show similar results.
Hazel Encarnacion, 24, a 2014 graduate of Hunter College, earned a degree in psychology. She is one exception.
Encarnacion (not part of the UBS report) lives on her own in Bushwick, Brooklyn — but knows her pals in her native New Jersey aren’t so lucky.
“All of them are still living at home after college, in the same towns they grew up in,” said Encarnacion.
“A lot has to do with their financial insecurity,” she added. “The scale of the student debt out there is just ridiculous.”
Members of the class of 2016 — 1.8 million bachelor’s degrees alone will be awarded this year — have seen their career prospects improve since the Great Recession.
But with the weight of more than $1.3 trillion in loans around their necks, taking advantage of those opportunities isn’t easy, analysts say.
The typical grad carries $35,000 in debt.
And with wages stagnant in many sectors, and job openings scarce in others, analysts also say the return to the nest is hardly surprising.
A record number of young adults — as many as 1 in 3, numbers not seen for generations — are living at home or lack independent living arrangements, according to a Pew Research Center study of the millennial population of 75.4 million ages 18 to 34.
The UBS study estimates that 63 percent of millennials move home after college — mainly to save money.
“It’s a huge generational shift,” according to Louise Gunderson, a financial adviser at UBS Wealth Management Americas in New York, who estimates that the typical millennial child of her clients who moves back home after college stays there for up to three years.
“In general, baby boomers had a lot more career opportunities,” Gunderson, herself the mother of two millennial daughters who are now independent, said. “And look how much more difficult it is to get into college today — the competition for places and the high cost of college, which is mind-boggling.”