Singletary: If grad returns home, set some ground rules

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WASHINGTON -- They're coming home.

Many parents already know this, but it's likely that after four, perhaps five or even six years of school, many college graduates, faced with a tight job market, higher gas and food costs, and mountainous debt, have no choice but to move home to get their financial bearings.

And you know what? Despite assurances that they only will stay for a little while, this time next year many of those graduates will still be living at home. That's what MonsterTRAK found in its annual nationwide survey of college students, recent graduates and entry-level employers.

Continuing a three-year trend, a little less than half of all prospective graduates, 48 percent, plan to boomerang -- or move home -- after graduation, according to the online career resource company.

Just 22 percent of last year's survey respondents said they planned to live at home for six months or less, but 43 percent have yet to leave, citing limited financial resources, MonsterTRAK found.

Chief among the reasons recent graduates say they can't leave home: college loan debt. Forty-two percent of 2007 graduates said they had student loan debt of $25,000 or more, and 33 percent have a credit card balance of more than $5,000.

Graduates may not earn as much as they had planned, either.

Thirty-two percent of employers expect to offer recent college graduates starting salaries of $30,000 to $40,000, according to CareerBuilder.com, the nation's largest online job site.

An additional 15 percent will offer $40,000 to $50,000. Just 11 percent of employers surveyed will offer more than $50,000.

Forty-two percent will offer less than $30,000.

So should you allow your graduate to move home? Lester Lefton, a scholar in the field of experimental psychology and president of Kent State University, doesn't think this trend of boomerang adults is healthy.

"Students went to college to become independent and gain the expertise to make a living for themselves," said Lefton. "Therefore, it is not a good thing for college graduates to move back to their parents' home."

If your college graduate will be landing on your doorstep, here are some things that need to be discussed before the bags are unpacked:

Rent. Will your graduate be paying for the privilege of living at home?

Other expenses. What else will he or she be responsible for, such as utilities and food?

Length of stay.

Personal financial information. Will the graduate share it with you?

So let's start with how long the returnee should stay.

"It needs to be temporary," Lefton said.

I agree that the first thing you need to do is establish how long your child will be staying and put the agreement in writing. All parties should sign a rental agreement. You can get one in any office supply store or purchase a generic one online at such sites as LawDepot.com.

The graduate definitely should pay for a share of food, utilities and other such household expenses. If you offer a complete free ride, your boarder may never leave. Life will become too comfortable.

Charging rent, however, is debatable. If you feel your adult child needs a little financial breathing room, don't charge. However, be careful about this decision.

Without the pressure of paying rent -- often the largest expense -- boomerang adults may end up spending irresponsibly on other things, such as purchasing a new, expensive car. Or they may live it up hanging out with their other young, single friends.

"They'll be spending $12 on martinis instead of saving money or getting a second job to pay off their debt," Lefton said.

If you do decide to collect rent, be clear about the amount and when it is due. Impose a late fee if the money doesn't come in on time.

That late fee might seem excessive, but part of your job as a parent is to help your child establish good financial habits. Paying bills late is the main way to ruin one's credit rating.

Parents who decide not to charge rent so their graduates can pay down debt and save (they should be doing both) should demand to see proof that they are following a plan.

Yes, I am suggesting you keep tabs on their progress. Ask to see bank statements. They also should show you their budget and a debt payoff plan. Push hard for them to verify their efforts to become independent.

I know what some of you are thinking. You can't pry into their personal finances.

But pry you must.

If you get resistance, hand that grown person the classified section of your local newspaper, folded to the rental listings. Or e-mail or text them apartment possibilities.

If they don't want to be accountable to you, then they need to get up and out of your house.

Write to Michelle Singletary in care of The Washington Post, 1150 15th St. N.W., Washington, DC 20081, or e-mail her at singletarym@washpost.com.