As she starts her new life as an independent adult, 21-year-old Elizabeth Kurtz can lay claim to a $455-a-month one-bedroom apartment in Montgomery, Alabama; a mismatched menagerie of hand-me-down furniture, including a folding “coffee table” exactly big and round enough to hold a single pizza; $30,000 in college-loan debt; a used car with 62,000-plus miles on it; an old-school flip phone that her smartphone-owning friends make fun of; a netbook computer so little it doesn’t have a CD drive; and a salary so small—$12,000 a year—that she gets food stamps to supplement her paycheck and to keep her from having to ask her financially stressed parents for money.
“I don’t have any dreams of a big house,” says Elizabeth. “I don’t have any dreams of a big family or a fancy car.” What she does dream of is a life filled with meaning and purpose, which is why she went to work for the federally funded community service group AmeriCorps for a year after graduating in December from the State University of New York at Potsdam with a degree in political science. AmeriCorps assigned her to Rebuilding Together, an organization that provides free home repairs for low-income families in Montgomery. In addition to her salary, she will receive $5,500 to help pay down her loans. Here are other smart ways Millennials can get help paying down your loans.
But for Elizabeth, the job has benefits that can’t be tallied on a spreadsheet. “We need to refocus our goals, be a little less selfish, and really think about the bigger picture at hand,” she says. She wants to join the Peace Corps when her year at AmeriCorps ends. “My dream is to be a good person who treats people as good people.”
Elizabeth’s altruism comes, in part, from watching her parents struggle in the past few years. Her mother, an Episcopal priest, and her father, an unemployed IT manager, live in Glendora, California, where Elizabeth grew up with two older brothers and a younger sister. In the last decade, her father, now in his 60s, lost two jobs after the companies he worked for were sold to bigger corporations. “It has made me really fearful of getting stuck in a corporate trap, just trying to earn money,” she says.
Elizabeth graduated in three and a half years instead of four to save tuition. In her final semester, she was working 20 hours a week in the school library and at a research institute. Along with her degree, Elizabeth’s efforts earned her valuable perspective and insight. “Each generation has gotten luckier and luckier,” she says. “I am not sure how much luckier we need to get. How much faster do our iPhones really need to be?” (These are products that Gen Z’ers will never use.)
The worst economic downturn since the Great Depression has left no American unchanged. This includes the group that holds the country’s future in its hands—the millions of young people who have graduated from college since the recession began in December 2007. That said, don’t blame millennials for these things.
They have sometimes been portrayed as lazy, self-absorbed, and immature, content to live in Mom and Dad’s basement and drive their car. More than 40 percent of recent graduates have moved back home, but it’s unfair to call it a lifestyle choice; the unemployment rate for recent college graduates jumped six-fold between 1998 and 2011, from 1.9 to 12.6 percent.
Chronically high unemployment has plagued what should be the start of their careers; in April, four years into a weak recovery, the U.S. unemployment rate was still an ugly 7.5 percent. Only half of grads have found a full-time job, and only 40 percent are in jobs that require a college degree, according to Cliff Zukin, a professor of public policy and political science at Rutgers who studies employment patterns among young people. Their median starting salaries are around $27,000, a 10 percent decline since 2007, and they’re graduating with a median college-loan debt of about $20,000, he says. “There is now more student debt than consumer debt,” says Zukin. “It’s a trillion dollars. It’s completely frightening.”
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. Younger generations may have a different idea of what parts of life are enjoyable; these are things millennials have “killed.”
“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.”
Her parents, immigrants from El Salvador and Guatemala, always told her that a college degree was the key to a better life. But in 2009, when Aura Perez, now 25, graduated from the University of California, San Diego, that no longer seemed the case. Aura majored in human development, planning to pursue a career as a preschool teacher. After graduation, she moved back in with her parents in Los Angeles, where the only job she could find was as a cashier at Kohl’s. She took it because, like so many of her peers, Aura graduated with substantial debt, and she was determined to meet her obligations. “My deferment on my college loans was about to end, and I needed to start making payments,” she says.
Between shifts on the cash register, Aura continued to hunt for more rewarding work, and after six months, she found a job at a tutoring center. Finally, in March 2011, after nearly two years of searching, she landed exactly what she was looking for, a position teaching at a nonprofit preschool in Encino. Still living at home, Aura is also working toward her master’s degree in early childhood education at California State University, Northridge, adding to a loan debt that now totals $24,000. “It was always in the back of my mind to go to grad school,” says Aura, who values education above all. “During breaks at Kohl’s, I would study for the GRE.”
A professor at Northridge has encouraged Aura to pursue a PhD. “I was shocked that she saw that in me,” Aura says. “It was always a goal of mine, secretly. I didn’t want to tell anybody.” But, Aura says, “if she sees the potential in me, then I think I can really go for it.” Ten years from now, she says, “I see myself as a professor. I see myself as being completely financially independent from my parents. I will be able to afford to live in my own apartment. I also see myself helping out my parents financially, instead of being a burden.”
When Megan Bressem’s grandparents emigrated from Greece in the mid-1940s, “people told them California was the land of opportunity,” she says. Her grandfather, a factory worker, bought a house in Sacramento in the mid-1950s and over the years added an orchard and made his own honey and wine. When Megan left home for college in San Diego in 2005, she and her parents and her younger brother and sister were living in the house, which passed to her mother when Megan’s grandparents died.
Then, in 2008, while Megan was away at school, it all came crashing down. Her mother, a merchandiser, took out a loan on the house but then couldn’t make the payments. Megan, one of Aura’s roommates at the time, was at a college baseball game with friends when she received a call from her father, a construction worker, telling her that the house was in foreclosure and they had only a few days to gather decades of possessions and move out.
Megan flew home and helped her parents put everything into storage. It took months to find an apartment for the whole family, but as Megan began her senior year, she thought they were finally settled. Then, a few months after her 2009 graduation, her parents were once again in financial trouble and unable to pay their rent. This time, she went back to Sacramento for the long haul. “I’m the oldest,” says Megan, 25. “I felt a responsibility to take care of the family.”
After temporary gigs at fairs and a restaurant, she finally landed a job as an office technician at the local utility company. Like Aura, Megan majored in human development, hoping to work as a counselor or a teacher, but now she is thrilled to have a stable job that pays $3,600 a month before taxes and provides benefits. The work itself is also engaging, and she can envision spending her career at the company. “I like logic, and that’s what my job is,” she says. “It’s problem solving, critical thinking and logic … There are so many things going on all the time that you have to be on top of it, and I like being busy.”
The family later moved into a house on the same street as their old home, and Megan was proud that she was able to help. “I value the experiences I received because of this,” she says. “Many people my age don’t know how to live in the real world. I feel like I’ve gained so many more resiliency skills by being able to live in the real world, to have responsibility.”
By spring of this year, both of Megan’s parents were working and were planning to buy the house they were renting. And Megan has signed a lease on her own apartment five miles away. For the first time in her life, she is living alone.
Today, Elizabeth is focusing on her work and the small pleasures that she can afford. Like dancing. “I love swing dancing,” she says. “If they are twirling me around, that’s fun. It doesn’t cost that much to dance.”
Elizabeth’s mother, Rev. Kelli Grace Kurtz, takes the long view when she thinks about her daughter’s generation. “I’ve been with many, many people at the end of their lives,” she says, “and I can tell you, whether they were materially well off or not has had nothing to do with their sense of peace and serenity. If Elizabeth and her cohort are learning that lesson now, early on in their adulthood, then they will find that peace and serenity sooner.”
Elizabeth’s car is a 2008 Ford Focus her parents bought for her last year. It has more than 62,000 miles on it now, and Elizabeth treasures the relief it offers. “It has great gas mileage,” she says. “It is my escape. I go for drives when I need to calm down. I don’t need to go anywhere; I just need to drive.” One weekend in late spring, the road beckoned. “I was mentally and emotionally worn out from a long workweek,” she says. “So I drove to Starbucks with my laptop, searched for directions to the closest beach, and two and a half hours later, I was in Pensacola, Florida.”
She spent the day sitting alone on the sand, just thinking about her life, without even her cell phone to tie her to the rest of the world. Later, writing in her blog, she described the sense of peace she’d felt and added, “I am perfectly comfortable being a traveler the rest of my life.”