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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: 2) by DannyB on Friday May 19 2017, @01:42PM

    by DannyB (5839) Subscriber Badge on Friday May 19 2017, @01:42PM (#512161) Journal

    Like you:
    * I don't get into debt
    * My finances are simple
    * I live within my means
    * I only buy what I can afford and have saved for (yes really)
    * And that includes saving for vacations -- but we get hundreds of dollars of leverage just by using CC to pay for things
    See the part where I wrote: we don't use the credit card for anything we're not prepared to write a check for today.

    I understand the game completely. That fact that it is unfair is not my fault. I'm just adapting to how the game works. The merchant pays credit card processing fees. But their agreement with the bank is that they can't charge credit card users more. So people paying cash or check, like you, are subsidizing my vacations. I wish it were not so. But that's how it is. Also, people paying outrageous interest rates on CC debt are subsidizing my vacations.

    --
    People today are educated enough to repeat what they are taught but not to question what they are taught.
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