15% of U.S. households have a net wealth of zero or below zero, these homes are not the poor, under-educated, and unemployed. These are working families with degrees.

Source: Survey of Consumer Expectations

There is a new study out from the Federal Reserve of New York that estimated 15% of U.S. households have a net wealth of zero or below zero. Your net wealth is a total of all your possessions such as cash, property, and retirement accounts minus your debts. Household debts are at a massive $12.3 trillion which is over 430 billion over the last year.

Perhaps, the most interesting part of this information is that these households are mostly middle class, working households. These homes are not the poor, under-educated, and unemployed. These are working families with degrees.

Part of the correlation here is the relationship between younger and educated people have negative wealth largely because of student loan debt. One in eight people with negative debt also has a graduate degree. However, 43% of those with negative wealth have a college degree.

Credit card debt and student loan debt are the main reasons these American households can’t keep their heads above water. In reference to student debt’s impact on negative household wealth,

“it is likely that the steady growth in student debt and borrowing, combined with the very slow rate of student loan repayment we have documented elsewhere, has materially contributed and will continue to contribute to negative household wealth and wealth inequality. On the other hand, the continued recovery in the housing market observed over the past few years may help households with negative home equity come out of their negative wealth position.”

Olivier Armantier, Luis Armona, Giacomo De Giorgi, and Wilbert van der Klaauw, “Which Households Have    Negative Wealth?” Federal Reserve Bank of New York Liberty Street Economics (blog), August 1, 2016, http://libertystreeteconomics.newyorkfed.org/2016/07/which-households-have-negative-wealth.html.

With the increase of debt and inflated cost of living, it is nearly impossible for millennials to succeed. While they are the most educated generation, they are also own the worst amount of student loan debt. With wages remaining stagnant and not growing with the rising cost of living and debt amounts – they are simply drowning. Resulting in the working class having nothing or negative to show for.