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."
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