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posted by martyb on Thursday May 18 2017, @09:28PM   Printer-friendly
from the I-owe,-I-owe,-it's-off-to-work-I-go dept.

Another day, another record broken.

The debt held by US households has surpassed its pre-2008 record, several financial outlets note. A peculiar spotlight in the associated numbers falls on student loans, where delinquencies are multiple times higher than for other debt types: 10 percent is the norm.

That's some pretty troubling news for the economy [and wider society], notes Rana Foroohar at sister outlet the Financial Times. First off, there's the association between the rise in student debt, and a decrease in home ownership for young people. This connection is exacerbated by them millennials increasingly turning towards income-based repayment programmes, which spread out the debt over more years.

Secondly, the level of student debt delinquencies ain't changing: the 10 percent figure is a near-constant over the past 4-5 years. People who've ever had a delinquency -- even if they recover -- have a much lower rate of home ownership at age 30 as compared to their non-defaulted compatriots. Not having a home means not filling it with stuff, and filling with stuff is kinda what the economy is based on.

Then, thirdly, it's not only students that are hit by student debt: increasingly, their parents are taking on debt too, to help out. Fuel for that debt sandwich is something peculiar: the rate of inflation in college admission costs is three times higher than the consumer price index. Must be that college professors wages have increased a lot, then.

Given that boomers and their millennial offspring are the two largest voting blocks in the US, a snappy future president-elect might consider raising the issue a bit.


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  • (Score: 1, Informative) by Anonymous Coward on Friday May 19 2017, @01:39AM (1 child)

    by Anonymous Coward on Friday May 19 2017, @01:39AM (#511933)

    $30000 tuition (not including food or housing or bills) / $10 hr / 40 hrs / 52 wks = 1.44 years working full-time per college semester. Hardly instant gratification. It's impossible to graduate debt free under those conditions. Sure, cut tuition in half using scholarships (which aren't available to everyone) yet it's still 8 months per semester. 8 months working, 4 months studying = 1 year per semester = 8 years to graduate except classes start expiring after 7 years so you'll never be able to graduate.

    You can go to cheaper schools, use scholarships, work multiple part-time jobs, start your own business, etc... but all those things become very saturated when every student and retiree is trying to do the same thing. It's certainly not impossible to graduate debt free, but it's far, far harder than most people care to admit. So much easier to blame lazy idiots than actually think about the problem. Even the people I knew who interned at Microsoft ($6,700 per month) every summer and worked at on-campus jobs still graduated with some debt. Of course they all had 85K+ starting salaries so they'll be able to pay it off if they aren't stupid, but it still required debt. I don't know anyone who didn't work while attending the college and with so many people trying to get the jobs no one had anything nearing full-time employment.

    Whether you need a college degree or not is a different matter. And who do you expect to teach students how to minimize most of their debt? Parents and society certainly don't, they have to do it on their own before they realize they need to learn it.

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  • (Score: 2) by kaszz on Friday May 19 2017, @03:52AM

    by kaszz (4211) on Friday May 19 2017, @03:52AM (#512000) Journal

    Take a degree somewhere else than USA?

    Work hard and save. Live in a cheap cabin with internet and read a lot?