When they turn 18, they get calls from credit card companies. A few years later, they’ve got a load of debt—many of them with thousands of dollars in student loans and credit card bills. Then they buy cars, furniture and nice new clothes—mostly on credit.

    They don’t remain innocent1 for long. Many members of Generation D feel disillusioned when they make sacrifices to repay lenders who gave them credit before they had well-paying, full-time jobs.2

    "A Real Revolution"

    Previous generations tended to begin adulthood in reduced circumstances—milk crates in the living room, Old Milwaukee in the fridge. They worked their way into material comfort while absorbing the lesson that buying is closely related to earning.

    In contrast, many in Generation D begin adulthood with material comfort—shelves in the living room, Pete’s Wicked Ale in the refrigerator.3 A little later, if they’re not careful, they have to throttle back on their credit-fueled lifestyle so they can pay the bills.4 Not all can, and they pay the consequences.

    Experts agree that today’s 18- to 30-year-olds have more debt than their forebears. That’s especially true of the majority of high school graduates who go on to college or trade school, where people commonly get student loans and credit cards, even if they don’t have jobs.

    People disagree whether that’s so bad. After all, young adults accept student loans and credit cards gladly and most repay dutifully. But critics worry that corrosive social effects result from the habit of taking on debt before one has sufficient income to repay.5

    Dreams and Debt

    The lure of living on debt increased in the 1990s. Tuition and fees skyrocketed, the federal government increased student loan limits, and credit cards were marketed vigorously on campus. In 2000, 78 percent of college undergraduates had credit cards.

    Subtler changes abounded.6 The economy boomed, MTV broadcasted from exotic spring-break locales, "Friends" portrayed young adults living comfortably in roomy apartments in Manhattan.7 Twentysomethings expected to live well right out of college or trade school.

    Under these circumstances, why not borrow? An average student loan recipient owed $11,950 upon graduating from a public university in 1996. In 1998, the average undergraduate had a balance of $1,879 on 3.5 credit cards.

    Some worry that all this debt forces grads to forsake exciting but low-paying jobs in favor of dreary but well-paying jobs. Patricia Somers, a University of Missouri researcher who interviewed 500 people for her research on student loans, tells of a Ph.D. candidate in English who was considering returning to her old job—dealing blackjack—after earning her doctorate.

    Not Putting It off

    Most borrowers, of course, look at it another way when they sign those loan papers: Student loan debt enables them to pursue their dreams, and other sources of credit allow them to live in comfort.

    Even as young people spend more than they earn, they’re not postponing8 life’s milestones—marriage, children and house.

    When researchers have asked students whether debt will cause them to delay marriage, parenthood or homeownership, a few say that debt indeed will have that effect. But studies show that deeds don’t match words: People get married, have kids and buy houses when they want to, and debt has little to do with the timing.

    Some people make a loftier claim: That debt forces people to grow up. Parents of teenagers make the same point when they