Young adults have been quicker to tackle debt during and after the recession than their elders.
A new study from The Pew Research Center shows the under-35 age group has destroyed the most debt since the recession hit.
Between 2007 and 2010, young adult households dropped their median debt by nearly a third. Households run by older Americans dropped median debt by only 8 percent. The number of debt-free young adult households is also at a record high – 22 percent.
Lest you think younger generations have suddenly become wiser, however, consider this: One of the main reasons for debt destruction among younger adults is that they’ve had a tougher time getting home loans, and fewer own or lease cars.
But that’s not the whole story: Credit card debt has shrunk a lot as well. The number of young adults with a balance is down from 48 percent in 2007 to 39 percent in 2010. Older adults only made half as much progress.
And the overall decline of debt for the under-35 group is also impressive because the number of young adults with student loans has ballooned from 26 percent in 2001 to 40 percent in 2010.
The recession didn’t affect the makeup of older Americans’ debt: 86 percent of it is still mortgages. Among younger Americans, however, more of the debt (15 percent, up from 9 percent in 2007) is now tied to education. The average amount of other kinds of debt for the group is declining, although residence-related debt still accounts for 74 percent.
You can dig into many more details in the full report.