The huge burden of college-loan debt—which could take decades to pay off—is driving young grads’ move to a simpler life. It could mean postponing many of the traditional milestones of adulthood, such as marriage and home ownership. According to a recent report from the Pew Research Center, the share of younger households with debt of any kind fell to 78 percent, the lowest level since the government began collecting this data in 1983. The only category of debt to increase was student loans, with 40 percent of younger households carrying them in 2010, compared with only 26 percent nine years earlier.
That burden has also made young adults wary of taking on consumer debt. “I have enough loan debt accrued from my education. I would rather focus on that than on excess debt from another source,” says Katy Doe, one of Elizabeth’s former roommates. “Maybe I will think about getting a credit card after my loans are paid off. Or maybe not. Freedom from debt sounds pretty nice.”
The good news is, the members of the Downsized Generation have managed to retain a sense of optimism and remain both determined and adaptable. The Clark University Poll of Emerging Adults, conducted last fall, found that nearly 90 percent of those ages 18 to 29 are confident that they will get what they want out of life. And fat bank accounts aren’t necessarily part of the equation. Whether they faced the faltering job market, watched their parents lose jobs, homes, and savings, or both, many of these young people are rethinking the values and ideals of previous generations. The trappings of status—supersize houses, pricey cars, a wallet full of credit cards—hold little allure for them. Instead, the Downsized Generation is creating a different version of the American Dream, one built on simplicity, service, loyalty, and responsibility.
“They are after more than money,” says Jeffrey Jensen Arnett, a research professor of psychology who runs the poll, and the author of When Will My Grown-Up Kid Grow Up? “They want to find work that they look forward to doing and that they believe does some good in the world.”
Katy Doe, 21, a junior majoring in music education who is still at college in Potsdam, juggles schoolwork and three jobs: as a circulation assistant in a children’s library on campus, making fund-raising calls at a SUNY call center, and as a pianist accompanying vocalists. She remembers how her whole family panicked during her sophomore year at Potsdam when her mother lost her teaching job. Her financial aid was calculated on both parents working full-time (her father is a support technician in the science department at Vassar College). When that was no longer true, she says, “We just had to whip out the credit card.” Katy doesn’t have—or want—a credit card herself now, because, she says, “I don’t like the idea of this constant debt hanging over my head.” She has fought to become self-sufficient and to avoid asking her parents for money. When she graduates in 2014, she expects to owe $30,000 in student loans.
With school districts across the country cutting their music departments, Katy knows that pursuing her passion to become a music teacher could be even harder than working her way through college. But she’s up to the challenge and ready to search the United States for a position.
The last few years have been a journey of self-discovery for Katy. For one thing, she has learned to value simplicity. “I’m not a materialistic person who needs tons of clothes and designer bags,” she says. “I don’t need too much to live comfortably. It’s a nice feeling.” More important is her hard-earned sense of personal accomplishment. Asked what she’ll be thinking on graduation day, she says simply, “I did this myself.”