Pushing Grads Out of the Nest

June 14, 2006 — -- This is the time of year when students graduate from high school and college. But instead of going out into the world, many stay put: An astonishing 44 percent of last year's graduates are still at home. And that's just the tip of the iceberg when it comes to the problems faced by new graduates.

In addition to student loan debt, high interest credit card debt has skyrocketed, while savings rates are at record lows. And millions of young adults are without medical insurance for at least a portion of the time after they graduate.

The new "Good Morning America" series "Leaving the Nest" will help explain to parents how to help graduates deal with post-graduation concerns like living expenses, managing debt and health care.

"GMA" contributor Barbara Corcoran suggests tough love may be necessary to push new grads out of the house and help them set up their new lives. It's a process some parents dread.

Leaving the Nest

One of the most difficult things parents face is pushing their children out of the nest. Even bringing up the subject can be painful.

Corcoran says she has received many e-mails on the topic, including both suggestions and war stories. Many parents recommend bringing up the topic during a long, scenic car drive -- a nonconfrontational setting that is private and provides a lot of time for conversation.

Avoiding the subject and letting your child live at home is probably the biggest no-no -- offering graduates too much help in the form of a free rent and food. But before pushing your kids out the door, it's wise to have a strategy.

Corcoran says parents must present kids with a firm exit plan -- including a deadline date and an ironclad agreement about any subsidizing the parents will do. It's a way to help them get started with an agreed-upon amount of money for a predetermined length of time.

The most important thing parents can do is make sure to stick to the parameters of the agreement.

Understanding Their Expenses

Out on their own for the first time, many graduates don't even fully understand their expenses. They don't know how they're going to get by. But there are ways for parents to help them understand how to pay their bills without becoming too involved.

Now is the time to help them economize. Corcoran says parents should help children set up a budget that will cover rent, utilities and even give them a little extra to put away into savings or to invest.

Simple tips include finding roommates if rents are high, and using debit cards rather than credit cards. This will keep them out of debt beyond those student loans.

Finding Health Insurance

Less than half of this year's college graduating class will have jobs lined up when they leave school, which means most of them won't have medical coverage. Corcoran said one 2004 study found that nearly 50 percent of high school graduates and two out of five college graduates don't have health insurance for at least some of the year after graduation.

But there are some options. College graduates who are covered under their families' plans are eligible for COBRA insurance -- a continuation of coverage -- for a maximum of 36 months.

College graduates have the option of continuing their student health benefits, which are available to all full-time students at accredited colleges or universities -- without regard to pre-exisiting health conditions. Once a student owns this inexpensive policy, he or she can continue the coverage indefinitely after graduation. There are also resources on the Internet to help find the best deals.

For grads who are moving out of the area, parents should remember to tell them how to find a doctor. Get referrals from your own doctors, check with friends, and make sure to tell your kids what they need to know about their medical histories.

For graduates, especially college grads, it's time to start thinking of them and treating them as adults. If you help them out with these simple tips, you're doing them a favor by helping them start their adult lives.

But what if they don't want to leave? Simple: Change the locks or downsize the house so there's no room for them. No matter how painful it may be, Corcoran says it's time to push them out of that nest!