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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: 1) by khallow on Wednesday April 05 2017, @09:27PM

    by khallow (3766) Subscriber Badge on Wednesday April 05 2017, @09:27PM (#489353) Journal

    As many have pointed out it isn't the ideal "free market" which is the cause of problems, it's the various entities that abuse their power to manipulate the market. Free markets are like standard communism, in an ideal world everything would be peaches and cream, but n the real world you get people abusing their positions of power to enrich themselves and their friends.

    High costs and nondischargeable debt are 100% due to the "free market" because those controlling the market used their positions of power to lobby for specific legislation which would enrich the universities (higher tuition) and the bankers (owners of debt). They colluded, something which a "free market" can not stop, and BAM they got a captive market to exploit. Socialized programs fail hard when you introduce a significant profit motive: see US education and health.

    Notice the difference here. You're equated the deliberate sabotage of free markets with "standard" communism set up as advertised.