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posted by cmn32480 on Wednesday April 05 2017, @05:22AM   Printer-friendly
from the cha-ching dept.

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


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  • (Score: 0) by Anonymous Coward on Wednesday April 05 2017, @03:36PM (3 children)

    by Anonymous Coward on Wednesday April 05 2017, @03:36PM (#489177)

    It's better than 'free'. It's an investment that gives a positive return.

  • (Score: 2) by Sulla on Wednesday April 05 2017, @04:16PM (2 children)

    by Sulla (5173) on Wednesday April 05 2017, @04:16PM (#489192) Journal

    With the current system where costs are unacceptable and out of control we have a massive glut of art/english/womens studies/non marketable degrees where people are stuck. These fields give back, but not enough that the graduates with these degrees are able to find jobs. Making education "free" will give us more people with these degrees now footed by the tax payer who will never see a return on investment.

    If we are going to go down the road of government funded education we should make STEM and a few other applied fields "free" but reduce the costs of other degrees persuent to need. This would add a market factor. Kids good at it would still be able to get music theory degrees based on merit based scholarships, colleges can themselves set up endowments to make these degrees "free". We dont need taxpayer money paying for the unnecessary, the consumer must still face some risk.

    I say this as a person who got an Accounting degree and feels that even if the system was changed I should still owe money because there are too many accountants. Currently down to 50k of debt from 80k after three years of repayment.

    --
    Ceterum censeo Sinae esse delendam
    • (Score: 2) by Gaaark on Wednesday April 05 2017, @05:55PM (1 child)

      by Gaaark (41) on Wednesday April 05 2017, @05:55PM (#489246) Journal

      Holy shit.
      My daughter has 30k in debt, and i cant believe that. I'd have a dump or two over your debt.

      Shit, i just crapped myself.

      Then again, if you are good at it an enjoy it,.... It maybe worth it to you. (Disclaimer: my daughter and son in law live with us to help them financially.

      --
      --- Please remind me if I haven't been civil to you: I'm channeling MDC. ---Gaaark 2.0 ---
      • (Score: 2) by Sulla on Wednesday April 05 2017, @06:20PM

        by Sulla (5173) on Wednesday April 05 2017, @06:20PM (#489258) Journal

        I am one of the lucky ones, I only spent three years after graduation to get an entry level job in accounting that four years later has turned into a real breadwinner. My wife and I are also fortunate to have a free place to live (temporarily) while we take care of an ailing grandparent.

        The debt load really does postpone "adulthood" if we consider adulthood being home ownership and children.

        I personally feel the bigger barrier to success being the acquisition of new job opportunities by temp agencies and the move from perm employees to temps. Where I live on the west coast 80% of accounting/bookkeeping jobs can only be got through temp agencies, with multi-month wait between openings on the other 20%.

        Good on you for helping out family like that, really useful in paying down debt. Wish more families extended that chance to their kids.

        --
        Ceterum censeo Sinae esse delendam