When Grown-Up Kids Flock Back to the Nest

June 21, 2007 — -- Through all the pomp and circumstance of college graduation, you were thinking about what to do with your now-adult child's old bedroom. Turn it into a study? A gym? A celebrity home-worthy walk-in closet?

But your graduate just told you she (or he) is coming home to stay — not just for the summer, but for the near future.

You're not alone. According to the U.S. Census Bureau, about 18 million young adults between the ages of 18 and 34 live with their parents — that's a 42 percent increase since 1970.

On "Good Morning America," financial contributor Mellody Hobson said the enormous price tag of a college education, not to mention the skyrocketing cost of home ownership, was to blame. The average college student graduates with more than $19,000 in debt from student loans, according to FinAid, and that does not include credit card debt, which is roughly $3,000 per grad, according to Nellie Mae.

In addition to the amount of debt burdening graduates' bank accounts, America's median home prices have soared 48 percent in the last five years, making it more and more difficult for many young people to purchase a home. So living at home with the folks starts to sound like a really good idea for a lot of graduates.

Most parents do not plan on having their children return home after graduation. Hobson said that giving adult kids responsibility was key to them eventually leaving the nest.

"The most important thing for parents to remember is that while your recent graduate may be sleeping under the same Superman sheets he did when he was 8 years old, he is no longer a child," she said. "My advice is fairly straightforward: Like a landlord, make your adult child sign a lease. It should include parameters on living conditions, their contributions to the household, their goals and a move-out date."

"Every three months, review the lease to evaluate progress and make any necessary adjustments," she said. "This contract helps the graduate become more accountable for their own expenses as well as the responsibilities of adulthood."