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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: 5, Informative) by Rosco P. Coltrane on Wednesday April 05 2017, @06:37AM (6 children)
By the time I pay off my loans, establish a household and settle into "adult" life I'll be too old to start looking for a mate to form a family. It's not possible to start before then because women won't date someone below their own station in life
Find yourself a woman with a student loan she's still paying off herself then. What's the problem?
Seriously, falling in love doesn't work like that. You don't look for "mates" in a pool of women who are all gold-diggers. When you find the right person for you, she may be young, old, poor, rich, healthy or sick, and you start making a life together regardless of the individual circumstances.
(Score: 0) by Anonymous Coward on Wednesday April 05 2017, @06:48AM (4 children)
Find yourself a woman with a student loan she's still paying off herself then. What's the problem?
We would then both have our combined student loan burden ON TOP OF the cost of raising children. We would both be in a worse position; the woman would be even worse off, having to deal with the burden of child birth.
The rational choice is for both people to stay single and childless.
(Score: 0) by Anonymous Coward on Wednesday April 05 2017, @07:31AM
What you need to do is make your illicit cash. Then you have options. Get a vasectomy. Make your late entry into the dating game and stay unmarried. When the time comes to pass on your legacy, you make a child - a genetically engineered one, in a test tube. Give them the best traits you can identify and synthesize. Use some uberwomensch's stolen genome for the other half so you don't have to make it all from scratch. Grow the embryo in a foreign surrogate or artificial womb. Falsify an identity as a single dad somewhere so you don't have to live off the grid with the kid. Hire a nanny if you need help. Teach the child your ways and leave them your pile of wealth, or let them fend for themselves - Buffett style.
(Score: 4, Insightful) by AthanasiusKircher on Wednesday April 05 2017, @10:56AM (2 children)
We would then both have our combined student loan burden ON TOP OF the cost of raising children. We would both be in a worse position; the woman would be even worse off, having to deal with the burden of child birth.
I don't know your detailed financial situation, but if you have a secure job and didn't take out a truly ridiculous amount in student loans for an undergrad degree, there are likely ways to make this work financially. My son was born when both of his parents were in graduate school (with the relatively meager stipends that generally accompany grad school), and it took us a few years after that before we both had landed full-time jobs. And we did fine, despite both of us also carrying debt from undergrad loans.
The rational choice is for both people to stay single and childless.
You seem to be really concerned about raising a child "in poverty," but "poverty" means a lot of different things to different people. Everybody wants to give their kids "the best that money can buy," but the reality is that the vast majority of families can't always afford that. If you want to have kids, you figure it out. And most kids can do well even with fairly limited resources, especially if you're creative.
I also have to note that your theory of gender dynamics seems quite antiquated. There are plenty of women out there who could be interested in a man who makes less money than them. I know the stereotype is that all women are "money sinks," but again, there are plenty of women out there who are fiscally responsible too. This is just my own opinion, but I personally would not be interested in a woman who would summarily reject all possible dates who aren't making more money than her. As someone else said here, not all women are "gold-diggers," and I'd personally run screaming from most who are, because no matter how much money you make, it might never be enough to make her "happy." And certainly any woman who isn't sensitive to the modern dynamics of (reasonable) student loan debt and the impact it has on people in their early careers should probably be avoided as having unrealistic expectations.
Again I don't know the details of your current financial situation, but is it possible to make modifications to your budget? Unless you made truly poor decisions in taking on ridiculous levels of student debt, is it possible to save more? Lots of people are rather wasteful in all sorts of ways they don't think about. Get a decent used car instead of a pricier new one, and you could save hundreds of dollars/month. Stop eating out for lunch very often (or getting your daily latte at Starbucks or whatever), and you might save hundreds of dollars/month. Sign onto a pay-as-you-go cell plan and stop using data except when necessary, and you might save a hundred dollars/month depending on your current plan. People who truly live in "poverty" have to make tough choices about their budgets all the time, and somehow many of them still manage to provide for a family.
Maybe you feel like you can't cut your budget anymore and still feel like you're struggling. But you say you have a "decent job" and imply you're living with your parents. Just exactly how much student loan debt do you have? In your initial post you imply that you could be living with your parents "well into your 30s or even 40s" -- again, just how much debt do you have? And did you complete your degree later in life or something? If not, twenty years to pay off student loans with a "decent job" AND living with your parents implies you must have made some ridiculously poor decisions in taking our insane amounts of loan debt and/or your job really isn't so "decent" and you need to be looking for something better. Either that, or you must be squandering your salary like crazy.
Just for comparison, I looked up stats [hamiltonproject.org], and the typical biology major with the current median amount of student debt who gets a job at the median salary for biology majors should be paying less than 15% of salary in the first year for a 10-year repayment plan, and by your sixth year out of school, on average the payment should be less than 8% of the median salary. While still a chunk out of your budget, your story thus sounds very atypical if you feel like you're struggling that much to pay off loans while living with your parents into your 30s. Of course, if you already made poor decisions in taking out ridiculously high amounts of student debt, this won't provide any solace... but given the stats, I don't think there's evidence for your claim that "This burden is literally eradicating future generations." As you can read at my link above, by year 10 of a 10-year repayment plan, the median across all majors is a student loan payment that's only 6.5% of salary... and that's for a person who should also be free of debt by early 30s, still well within the range to begin a family.
None of this is defending the rising levels of student debt or attempting to downplay a bad trend. Just that your characterization of your situation is either very atypical because of making decisions to take out loan debt significantly above average, or you're exaggerating.
(Score: 2) by AthanasiusKircher on Wednesday April 05 2017, @11:14AM
By the way, I should also say that if you're truly struggling because you got suckered into debilitating student loan debt, I'm really sorry to hear that. But the point of my post is that it sounds like your situation -- combined with what are (to me) potentially unreasonable demands for a mate -- is not necessarily typical.
(Score: 0) by Anonymous Coward on Wednesday April 05 2017, @02:14PM
Rather, they rely on childless Anonymous Cowards who live with their parents to pay for their welfare programs.
(Score: 0) by Anonymous Coward on Wednesday April 05 2017, @06:51AM
Get a load of this guy, he thinks the spouse won't ever bring their financial (or whatever) problems over and then run off with someone better when their debts are settled.