A new poll says that 40% of U.S. parents claim they have paid off debt on behalf of their adult children. Here’s a deeper look into the survey numbers (from CreditCards.com) and what it means to both parents and children.
First, know that younger Americans are flirting with disaster when it comes to credit card debt. On U.S. college campuses alone, 76% of undergrads have credit cards, with the average balance at $3,173, according to a 2009 study by Sallie Mae called “How Undergraduate Students Use Credit Cards.” According to Sallie Mae, that’s the highest in the years the study has been conducted.
Even when students get out of school and (hopefully) into the job market, the debt burden doesn’t ease. Aside from credit card debt, the average American college graduate has seen their loan debt amount raise by 5% in 2009 alone, as measured by the nonprofit Project on Student Debt. That brings the average student loan debt amount to $22,000, the Project on Student Deb reports.
Completing the perfect storm, younger Americans are among the top of the list in U.S. unemployment lines. According to the U.S. Labor Dept, American youth (up to age 24) have a jobless rate of a whopping 53.4% through September, 2009.
That’s where parents – and their checkbooks – enter the picture. The CreditCards.com survey reveals that two out of five Americans with “adult” children have paid off their kids’ debts, usually in the form of credit cards, car loans, and medical bills.
According to CreditCards.com, which used GfK Roper to run the survey, the poll focused on American families with adult children over 18-years-of-age. In the survey, the most frequently-paid-off debts were:
- Auto loans (40 percent)
- Medical debt (37 percent)
- Utilities (31 percent)
- Credit cards (30 percent)
- Student loans (29 percent)
- Mortgage (11 percent)
- Other transportation-related bills, such as car repair, gas or tickets (5 percent)
- Personal loans (4 percent)
- Other kinds of loans (6 percent)