By  on May 23, 2007

Debt burdens spiraling into tens of thousands of dollars are influencing young adults' choices of colleges and careers, where they live and how they spend money, but it's not putting a cap on the group's purchases of apparel.

Young adults ages 18 to 24 spent $30.3 billion on clothing in the 12 months ended March 31 — 9 percent more than the $27.9 billion they spent a year earlier, according to The NPD Group. That growth followed a spending increase of 4.5 percent in the comparable period in 2006.

The age group, along with younger teens, typically buys more items to wear each year than any other part of the U.S. population. But, while overall outlays on apparel by collegians and recent graduates are on an upswing, there is a widening economic divide between affluent twentysomethings and those whose financial resources are considered middle class or working class. The gap is projected to accelerate luxury apparel acquisitions by the better-heeled crowd, and prompt increasingly practical choices by their less well-off counterparts.

"A wedge is being inserted between the affluent and the middle and working classes," generation expert Bill Strauss observed of today's college students and recent graduates. "The affluents often have no debt burden and can look to their family for support. The other two groups have significant levels of debt."

In fact, the median level of student debt among bachelor degree recipients in 2004 (the most recent College Board data) was $19,300. About one-quarter of graduates from private nonprofit colleges and 14 percent of those from public, four-year colleges graduated with loans of $30,000 or more to repay. "It is almost certain that debt levels have increased since 2003-2004 because neither family incomes nor grant aid has kept pace with increases in college charges," stated the College Board's newest student debt report, part of its "2006 Trends in Higher Education" series.

A lot of the purchasing done by collegians and recent graduates is being driven by the financial resources of their immediate families, observed Strauss, who, with Neil Howe, has just published an updated edition of "Millennials Go to College" (LifeCourse Associates: $59.00). It's a realm in which young adults from households with incomes representing the top 10 to 25 percent of wage earners are experiencing a growing advantage over the middle and working classes, which, Strauss noted, are continuing to lose "a lot of economic ground."Nonetheless, Strauss expects the roughly 30 million Americans ages 18 to 24 to enjoy the time they'll spend shopping, in part because "it's the main street they've grown up with and they don't know anything else."

A renewed emphasis on personal style and grooming to express one's individuality has been sparking the apparel spending of twentysomethings and older teens in the past 12 months or so, noted Marshal Cohen, chief industry analyst at NPD. In addition, the more competitive nature of the entry-level workforce and of jockeying for the most elite education credentials have bred a desire to "dress to impress," Cohen said.

"The younger generation has reached to fashion to make a statement whether for their career, socially or for themselves," he added.

With American style transformed by an increasingly casual sensibility during the Nineties, today's collegians, perhaps more than their predecessors, will need to build work wardrobes. Wearing suitable clothes on the job is becoming an issue for recent workforce entrants, observers said of a generation that has grown accustomed to donning flip-flops, cargo pants and pajama bottoms as streetwear.

Strong demand for designer apparel is seen coming from a group Strauss dubbed "trustifarians" — those from families with annual incomes in the top 5 to 10 percent of U.S. households, some of them with actual trust funds and others simply getting money from their parents on a regular basis. For the rest, the author-generation expert said, new clothes "will have to be practical and worth the money, whether for work or for hobbies like bicycling and kayaking. But career wardrobes will take priority."

Current purchasing patterns appear to support that outlook, as about half of 16- to 24-year-olds said they typically planned their purchases of apparel in January, February and March; three-quarters of those transactions were made to acquire new items rather than to replace existing ones, based on a representative group of females in their teens and 20s surveyed for Cotton Inc.'s Lifestyle Monitor.

In addition, more than two-thirds of the group said they like or love shopping, and clothing was by far their "item of choice" to shop for: 57 percent favored it, followed by shoes, a distant second, preferred by 17 percent, and home electronics, 10 percent."I see a lot of 'live for today,' extreme spending," trend analyst Kiwa Iyobe said of college students and recent grads. "Either they have wealthy parents or are putting it on their credit cards. There's also a desire for frugality, a desire to conserve," she continued. "There's a recycling and reuse scene."

Such choices are not entirely fueled by economics, Iyobe noted, adding that their fashion choices are influenced by such things as status grabs, eco-consciousness and idealism. "We live in a society where everything is branded — your college, your job, your fame. All these things say something about you," she said. The impact of prestigious credentials implied by a college's name is akin to the effects engendered by a must-have status bag: It breeds status anxiety, the trend analyst observed.

Fashion brands that stand to benefit from such a mind-set, Iyobe posited, include H&M and Zara, "which keep bringing in new styles all the time," and stores like Uniqlo that offer graphic T-shirts, which "can represent you in a very literal way."

Rising food and gasoline prices, now north of $3 a gallon, are adding pressure to debt-laden young adults who are "much more affected on financial and emotional levels" than those in their late 20s, NPD's Cohen related. "By the time they're 25, they're used to it," he contended, and they've learned from mistakes made with early access to credit cards. In 2004, one-third of college undergraduates had credit card debt of $2,000 or more and the median level of credit card debt for undergrads was $900, according to the most recent Nellie Mae findings.

The median salary for 15- to 24-year-olds in 2005 — "the bulk" of whom were 18 or older, said a Census Bureau spokesman — was only $28,770.

But the ongoing effects of such forces didn't keep Americans 24 and younger from generating almost half — 47 percent — of consumer spending on apparel in the 12 months ended in March, as their $92 billion in expenditures compared with the $103 billion spent by a considerably larger 25-and-older contingent.

By The Numbers:l 18- to 24-year-olds spent $30.3 billion on clothing in the year ending March 31, a 9 percent increase from a year earlier, according to The NPD Group.

l About 25 percent of graduates of private nonprofit colleges and 14 percent of those from public, four-year schools graduate with loans of $30,000 or more in 2004, according to the latest College Board data.

l About half of 16- to 24-year-olds said they typically plan their apparel purchases in January, February or March, found Cotton Inc.'s Lifestyle Monitor.

l Cotton Inc. found that, in their shopping preferences, 57 percent favored clothes, 17 percent shoes and 10 percent home electronics.

l The median salary for 15- to 24-year-olds in 2005 was $28,770, said the Census Bureau.

l A third of college undergraduates had credit card debt of $2,000 or more in 2004, according to Nellie Mae.

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