Survey shows high levels of debt, financial stress among state’s young adults

Liz Hoffman

William Pruitt is punching his ticket for life in the upper-middle class.

He has a bachelor’s degree from the University of Hartford and a law degree from Syracuse, and he’s working toward his doctorate in criminal justice at Northeastern.

For now, he rents a one-bedroom apartment in Quincy, and he hopes to get a teaching position after he graduates.

He’s also in debt up to his ears.

Pruitt, 28, carries approximately $150,000 in debt, mostly in student loans. He also takes out private loans for living expenses that his $1,800 per month stipend from Northeastern doesn’t cover.

“The money I spend on my education is definitely worthwhile, but every now and then I think about how long it’s going to take to pay it off,” he said. “It can be stressful.”

Pruitt is not alone. The state’s young adults carry high levels of debt and say they worry about their finances, according to a survey released this week. Pruitt was one of 800 participants statewide ages 25 to 39 surveyed by MassINC, a public policy think tank.

“The financial stress numbers really popped out to us,” said Dana Ansel, director of research at MassINC.

Four in five young adults said they have experienced some kind of financial strain over the past five years.

Nearly a third reported taking on more debt than they can handle, and four in 10 are at least $10,000 in debt, not including a mortgage.

Most debt comes from credit cards, car loans and student loans, the study found.

Catherine Williams, vice president of financial literacy at the Chicago-based Consumer Credit Counseling, said Bay State residents are not alone. The company has seen a shift in the profile of the clients it counsels.

“It used to be a 34-year-old family man with 2.5 kids and a mortgage,” Williams said. “Now it’s increasingly people in their late 20s who find themselves, almost surprisingly, in a lot of debt.”

Williams cited the rising costs of college and “start-up expenses” like cars and housing. But the biggest factor, she said, is a lack of financial literacy; young adults are encouraged to establish credit, but no one tells them how to do it without racking up debt.

“They start out in the hole, and then it’s hard to get ahead,” she said.

Despite that, the survey found that most young adults are optimistic about their futures. Most see home ownership in their future and expect better lives for their kids.

“I’m definitely optimistic about the future,” Pruitt said. “It’s just a question of getting there.”

The “Great Expectations” survey asked 800 young adults, ages 25 to 39, in Massachusetts about their lives – their jobs, their finances, their families, their education. It asked them what they think of the media, their government, and their future. Here are some of the highlights: 

  • No surprises here: Finances remain the biggest problem facing young adults. Four in five reported some level of financial stress in the past five years.
  • Here today, gone tomorrow: One in five young adults expectllsll to leave Massachusetts over the next five years. Many cite the lack of job opportunities and affordable housing as factors driving them from the state.
  • Young adults are increasingly concerned about social and environmental responsibility, especially when it comes to their jobs. Nearly three-quarters believe it is very important to work for an employer that “is respectful of ethical values, people, communities, and the environment.”
  •  Almost half have a four-year college degree or higher. And they make more money, carry less debt, and report lower levels of financial stress than those without college degrees.
  •  Young adults have little faith in state and local government. Just 4 percent are very confident in government’s ability to solve problems, and nearly two-thirds are not too confident or not at all confident.

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