Student Loan Debt, Rising Housing Costs, and High Unemployment Undermine Financial Independence
New York’s young adults – some members of Generation Z (born 1997-2012) and Millennials (born 1981-1996) – are facing a complex economic landscape including higher unemployment rates, increasing costs, and larger debt burdens, that threatens their financial well-being, according to a new report released by State Comptroller Thomas P. DiNapoli.
“Young adults are dealing with mounting obstacles to achieving financial stability and independence,” DiNapoli said. “They face a shrinking pool of entry-level jobs and rising unemployment, driven in part by AI. Increasing housing costs along with growing debt are also making it increasingly difficult for them to live independently and build their future. Addressing affordability, expanding housing options, and improving access to education, job training and employment opportunities are essential to reversing these trends. Retaining the state’s young workforce is a critical component of New York’s prospects for its long-term economic growth and prosperity.”
In 2023, there were 4.6 million New Yorkers aged 18 to 34 (“young adults”) representing 23.2% of the state’s population and 6.1% of the young adult population nationwide, according to the Census Bureau’s American Community Survey. However, New York saw a 1.9% decline in this age group over the past decade, while the national population of young adults grew 4.2%.
The majority of young adults reside in the downstate regions (New York City, Long Island and the Hudson Valley), with one in four New York City residents falling into this age group. From 2013 to 2023, seven regions across the state experienced a decline in their young adult populations, with the largest decrease in the North Country (8.5%).
For 18-year-old high school graduates in New York, over half, 56.7%, pursue higher education, more than 37.3% of high school graduates nationally. People aged 26 to 34 are more likely to have a bachelor’s degree (31.5%) compared to those aged 35 and older (19.6%).
Job Market
For 18- to 25-year-olds, the labor force participation rate in 2023 was 47.6% with just under half (49.9%) attending school (high school and above). For those in school and in the labor force, the majority (87.8%) worked mostly part-time with a median work week of 21.7 hours. Employment for the 18- to 25-year-olds is largely in service occupations such as sales, food preparation or serving. Young adults aged 26 to 34 have the highest participation rate at 84.7%. Just under 90% of those who are college educated (and not currently attending school) are employed compared to 68.1% of those without a college education.
Unemployment
Compared to older New Yorkers, young adults face higher unemployment. The unemployment rate for young adults was 8.6% in 2023, more than double the statewide average. However, unemployment varies based on race, ethnicity and education. In 2024, the unemployment rate in New York for Black or African Americans aged 20 to 24 was 18.2%, more than double their white counterparts; the same was true among 25- to 34-year-olds. Young adults of Hispanic or Latino ethnicity also had higher unemployment rates. Asians aged 25 to 34 had the lowest unemployment rate. The unemployment rate for those in the 26 to 34 age group who do not have a college degree was over two times higher than those with one in 2023.
Expenses
The largest expenses for young adults were housing, food and transportation, which comprised over two-thirds of their total spending in 2023. Housing represented the largest expense, 35%, and food and transportation were a third of expenses.
Since 2013, median rental costs for housing across New York have increased by 33%, with the number of lower cost units declining. Due to these increased costs, 35.9% of young adult renters now face housing cost burdens with 22.4% spending 30-49% of their income on rent and utilities and 13.4% spending 50% or more. In addition, home ownership by young adults has become increasingly difficult. In 2004, 31.2% of 26- to 34-year-olds owned a home; in 2023, it was 23.4%.
Debt Burdens
Young adults held nearly 30% of the nation’s total household debt in 2024. Since 2013, all debt held by young adults has grown by 67.8% ($2.1 trillion), growing faster than the 52.3% increase in debt held by individuals over 40.
In New York, 1.3 million young adults aged 18 to 34 had student loan debt totaling $40.5 billion, 42.1% of the total amount of student loan debt held by all age groups in the state in 2024. Average student loan debt in New York, just over $30,300, was the second highest in the nation, just below Maryland ($30,400). Reported student loan delinquencies, which are 90 days or more late on repayment, grew from 0.3% of young adults nationally at the end of 2024 to 9.7% in the second quarter of 2025, following the end of the Department of Education’s pause on credit reporting for student loans in October 2024.
Report
Obstacles to Independence: Financial Challenges Facing Young Millennials and Gen Z
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