Recent college graduates who borrow are leaving school with an average of $34,000 in student loans. That's up from $20,000 just 10 years ago, according to a new analysis from the Federal Reserve Bank of New York.
In that report, out this week, the New York Fed took a careful look at the relationship between debt and homeownership. For people aged 30 to 36, the analysis shows having any student debt significantly hurts your chances of buying a home, compared to college graduates with no debt. The cliche of "good debt" notwithstanding, the consequences of borrowing are real, and they are lasting.
The report paints a mixed picture of how student borrowing has evolved over the last decade, since the financial crisis. There are some bright spots: For example, student loan defaults peaked five years ago and have declined ever since.
And repayment seems to have slowed down among high-balance borrowers —those who owe $75,000 or more. Meaning, after 10 years, they have paid down only one-quarter to one-third of what they owe.
On the face, this isn't necessarily good. But taken alongside the decline in defaults, Fed president William Dudley said in a press briefing Monday, it reflects something good. That is, graduate students, in particular, are signing up for government programs intended to help make payments more affordable.
Source: NPR
(Score: 4, Insightful) by Rosco P. Coltrane on Wednesday April 05 2017, @06:28AM (1 child)
I got a programming job and immediately earned more than my wife's parents put together.
Do they live in a trailer?
(Score: 0) by Anonymous Coward on Wednesday April 05 2017, @07:48PM
Her dad worked for a place that sold electrical stuff, kind of like the electrical isles of a Home Depot or Lowes. He was out on the floor helping customers pick the right parts. Weird story: He helped the Boston Marathon bombers, who were looking for a switch, by directing them to a different store that might stock it.
Her step-mom dispatched cable company service technicians.
I beat that, before even graduating, with $48,000 per year in 1999. (so $71,000 in 2017 dollars)
They lived in a floor of his mom's house; he helped her as she got old. A trailer would have been more independent, but otherwise a downgrade.
When you are a knowledge worker supporting industry, it's easy to lose touch with how normal people live. Remember that in 1999 the median household income for the USA was only $46,236. The working-class families, which are a large portion of the population, are mostly below that median.