Student loan debt has reached record level highs and its impacts are being felt throughout the entire economy. This crisis will be hard on those deeply indebted, but it is also a drag on the nation’s economy as a whole.
For an entire generation of Americans, who were told they would amount to nothing without a fancy piece of paper that would cost them tens of thousands of dollars (or more in some cases) student debt is nothing new. According to NBC News, many so-called Millennials, the desire to attend the best possible school. Couple that with the demands for graduate degrees and skyrocketing college costs, student loans may be fundamentally altering the economy.
A recent analysis from the staff at the Federal Reserve found that the average student loan debt held by those in the 24- to 32-year-old age group doubled from $5,000 to $10,000 between 2005 and 2014. In that same report, the Fed also found that home ownership fell nine percentage points in that same time period for those in that age group.
Student loan debt has already affected the housing market, and because of the amount, most are required to pay back, more and more debt continues to pile up for those already maxed out. And it almost always begins with student loans.
On average, Millennials, ages 18 to 34, carry about $36,000 in debt, according to a 2018 study by Northwestern Mutual Life. That looks very similar to the numbers for Generation X, who carry $39,000 in debt on average, and Baby Boomers who hold about $36,000 in debt, according to the study. –NBC News
However, once you break that down, you can see the strain that student loan debt has put on Millennials.
The largest source of debt for Gen Xers and Baby Boomers is their mortgages, which clock in at 32 percent and 25 percent respectively for those age groups. The biggest source of debt for Millennials? Personal education loans at 21 percent. –NBC News
Rather than saving and putting a down payment on a house, Millennials have chosen to borrow money for education. That easy money they borrowed is to blame for the skyrocketing costs of college as well. According to the financial guru, Dave Ramsey, far too many people struggling to pay on their student loans while their future hangs in the balance. It’s a familiar problem that’s only getting worse. America’s total student loan debt is now nearly $1.5 trillion. On average, students take 10-20 years to pay back their student loans.
THEY ARE NOT GOING TO PAY IT BACK. WE (THE TAXPAYERS) ARE.!!!!
Most Student Loans are Guaranteed Student Loans backed by the US Government which is a total scam and a sham and only increases the cost of college tuitions and the likelihood of more bogus loans that are attached to students because they fail to track what they actually owe on their student account.
Then they are duped after college graduation to consolidate all the loans into one, washing the fraud loans into the mix with the legit student loans. Thus you are on the hook bigtime for all of it if you consolidate and refi, and if you fail to pay on the loans, you will get your Social Security Checks Garnished monthly for up to 15% until your student load debt is paid off. Only way put of that is go on Disability and then they have to pay you the full amount of your SS benefits monthly.
Its a massive scam. Never ever consolidate your student loans unless you are absolutely 100% positive you owe the entire amount. If you dispute a certain individual loan, then exclude that single loan number and amount from any consolidation or refi.
I knew a stupid lady who consolidated just to make a payment affordable and they attached thousands of dollars in fraudulent loans to her loan package in the refinance consolidation. Once she consolidated and refinanced the bogus loans, she no longer can dispute the bogus loans, because they were washed away with this new loan amount. Stupid is and does. Pay attention numbskulls, or you will get schooled alright.
not again !
Cry me a fucking river !!! I call bullshit on these comparisons by Snyder. First the average student debt held by millenials ($10,000) is payable with the education they have … or should be …. if they quit buying $1,000 iphones and other “give me, take me, buy me please” digital crap.
A little discipline goes a long way.
Second,baby boomer mortgage debt is the REMAINDER after their student loan debt were paid. Millenials can buy homes too, after they repay their student loans. Continue to live in your mother’s basement for another year or two now that you have a job and pay off your loans !!!
Vacations ??? Fuck you !!! You don’t need no fucking vacation until you pay your student loans. New cars ??? Fuck you !!! Buy a klunker and pay off your student loan debt while you build your credit profile !!!
That 21% debt to income ratio for Millenials will decrease as they pay down their student loans and work for a living. There has never been a better time for a kid to get a good job. We can’t hand out “FREEBIES” to Millenials by eliminating their student loans, (which is the unspoken suggestion by Snyder) any more than we can afford to subsidize ILLEGALS, Chinese, and the NWO Agenda.
Suck it up kids !!! Grind it out !!! Boomers did !!! 🙂
Durango Kidd, damn good point you made about buying a klunker. I bought klunkers for my whole adult life, put money into them, and made them last longer than they should because I don’t make enough money to even WORRY about credit. Living within your means goes a lot further than most people think. TharSheBlows probably still thinks I’m stupid for buying old cars and keeping them on “life support”, LOL. I’ve only done what I had no other choice to do from a financial standpoint. There’s morons where I work that are underwater on car loans and go broke every week to pay their notes. That’s the kind of people who don’t know how to get their priorities straight. YOU NEVER EVER GO BROKE TO PAY FOR A CAR. Yes, transportation is important but it’s NOT THE ONLY IMPORTANT THING.
Yeah, it’s hard to know how much to throw into them. There’s a dividing line somewhere between frugal and “money pit” on those things, and the hardest part is you’re often trapped into “well I gotta throw money at it to get to work after all”…
Therefore own two. Minimum coverage insurance (I mean not liability wise certainly, but in terms of vehicle damage itself). Something too expensive comes up, lose the thing, use the spare, start over I guess. It helps to know what you’re looking at when you buy it. Also helps to assess it very quickly post purchase and flip it if you have to while it’s still worth about what you paid for it.
Fully agree on the car thing.
Presently my newest vehicle is
15 years old, my oldest is 26.
I presently own 4 vehicles.
You need extras in case a primary
vehicle breaks. That is an added
One thing about older vehicles,
look beyond price, look at parts
availability. Once cars get older
parts get harder to find. The vehicle
will break. even with a world full of
junkyards some not so common vehicles
may be in short supply.
I once needed a part for a truck.
I found a junkyard with 20 of those trucks.
every one had been stripped of
the part I needed. I like the old style do-it
By the time I sold that vehicle it
was mostly Off-road after market parts.
A rolling violation of federal laws.
Newest vehicle is 44 years old, oldest 52 years. I planned this out- Chevys with small blocks. One TH350, one TH400. Southwest- no rust. The 67 has Vette spindles [69-82] which bolt in to the 65-70 Chevy full size. 12″ rotors with original rivets! Camaro alloy rims [82-92] bought 15 years ago $25 each.
Needless to say, parts are available- GM is still making the 350 small block.
new tranny only $1,000- https://www.summitracing.com/parts/tci-311098/overview/
Both have have A/C with the Harrison A6 compressor. Since freon is outlawed, I run a mix of propane and isobutane [found in some camping fuels]
Yeahhhhh Boomers also “grinded out” LSD, pot, free sex, every STD known to man, and a divorce rate the likes of which pretty much spells total societal failure on a mass scale. So I wouldn’t be too proud of yourselves.
I’d take that off you if you were from the gen prior to… oh no wait I wouldn’t.
See… y’all got houses for like 4x annual income. Now it’s like you can work 4 jobs each and your kids might pay off the mortgage after they’re working 4 jobs each and you’re dead.
Agree with you on every other point. I’ve never owned a new car in my life, same with computer, etc etc ad nauseum. My last car has costed me $400 to buy. I’ll be replacing the oil pan and front driver’s CV axle personally. When it becomes totally necessary that is.
“See… y’all got houses for like 4x annual income.”
The homes for blue collar people in 1960 were commonly 850-1000 sq/ft ranchers built on a slab with a car port as were in the Levittown developments of the era. The 4000 sq/ft McMansions medical doctors owned back then when they still made house calls.
Awesome. I totally agree!
Double Master’s in Underwater Hair Massage Therapy and How to Speak My Own Language.
That will be $300,000 please…
Usury should be outlawed. The criminals are our rulers. Myer Lanskey, murder incorporated, never went to prison like Al Capone. He and other gangsters rose to prominence. Student loans are nothing but crimes.
Arrest traitors. We are occupied. Save the children from economic slavery. Punish usury, loan sharking, student loans.
Only American citizens should be allowed to attend American colleges, except for foreign exchange students.
Stop encouraging foreign migration by ending handouts, housing, and education to foreigners.
This Country is being bled dry.
We can’t afford this so it must stop even if it requires a revolution, even if it requires sacrifice.
Of course it’s being bled dry. I mean it’s win win from the Democrats’ perspective isn’t it? More imported voters, and more people on the dole. Once you have people on the dole you can blackmail them. Do what I want or no soup for you.
Democrats have no vested interest in raising people out of government dependency. This does not leave Republicans and business interests off the hook. The “Insurance Industry” (hate the term as industry used to make things) loved “Obama Care” that forced employers to buy insurance. As Marx said, “One capitalist will sell us the rope to hand another”.
Oh yeah. That degree in underwater basketweaving is really paying off.
Different day, same bullshit.
We are rapidly becoming the next Venezuela, may God forbid. I’m sure that many of us come to sites like this to check the mood of the country and look out for coming disasters. On the RENEW AMERICA site today Michael Oberdorp has an article where he lays out a very good argument for Civil Disobedience as we can’t count on either Party to save the Republic.
In the State of Missouri a State Senator named McDaniel has put forth a bill to REQUIRE all people between ages 21-35 to own an AR-15. The McDaniel Militia Bill.
Maybe this Student Debt crisis is the tipping point, who knows? As Rahm said, “Never let a crisis go to waste”.
so watch out fur dem hogs
Spent my student loan money on a brand new 1980 Fatbob Superglide , road it Vo-tech . Still employed in that field . High pressure Steam , Streetgliding to work on nice days now . High Pressure people are in demand , my group of 6 average Age is 58 . I do better than many with a deg.
Sorry but what is/are a Fatblob Super glide(s)
I think he meant to say a fat slob on a slip and slide.
I study the freaky effects of economic decisions. And student debt is fascinating. While it is true it harms ex student ability to buy homes, it does not stop them from consuming. They will fund consumption through work and debt. Because a house is a massive commitment and sacrifice, that avocado sandwich and the $500 sweater will always win out for this demographic.
Homes instead will be bought by overseas investors or by highly educated Asian migrants. So housing will stay turning over, but instead of Millennials moving in, you will have Asians.
As for Millennials and younger, many will turn to sex work to fund their debt payments, so we all win in the end. Hot Asian neighbors and hot indebted youth on speed dial and an app away.
They’ve been trained to be adrenaline junkies and house buying doesn’t do it.
College age students really do not understand debt beyond owing their friend for the coffee at lunch. It seems to take a few more years before the concept of long term payments on a loan is clear. It could be part of the brain maturation process; just my guess.
And politicians in their zeal to make things more fair have made things inestimably unfair.
Nice Frank, but it appears you also study other “Freaky Effects” and I can’t help but get a good laugh just about when I get down to the last sentence or two.
FT, you comments are probably true but I would pass on the Asians and millennials. You might catch something.
Well, if we go to war then all these kids can get drafted (girls too) and they’ll be able to pay back their loans, simple.
K Steele, very doubtful they’ll make it back. ‘Cause without that cell phone they couldn’t find home from two blocks away.
You can bet, at some point, there will be some move by the federal government to forgive student debt. It is just a matter of time. If the socialists win it all in 2020 it will more than likely happen soon after. In effect making a college education virtually free at the taxpayer expense. College costs will really explode then, as will the national debt. A dark, dystopian future is just around the corner.
“Rather than saving and putting a down payment on a house, Millennials have chosen to borrow money for education.”
Is a senseless remark. You have to have a job to
save money for a house. Indeed to be able to afford a house you need a fairly good paying job. You need some sort of training or education to get a good paying job. Most people resort to borrowing to pay for that training or education.
The failure is deciding to get a degree in some easy to get “studies” degree and finding out nobody will pay you for those degree skills. So you have debt and no way to buy a house.
These people maybe educated but they are stupid.
The government should stay out of the “loan business”. That’s socialism. They…well, supposedly taxpayers… are backstopping most of the mortgages AND the student loan debt. Shoulda, coulda, woulda…anyway they didn’t, so what can you do? Not much, since your vote means nothing.
The problem with student loan debt is the same as with mortgage debt. It’s called compound usury. If your note has 8% interest, the loan amount will double in 9 years if payments are not made. Rule of 72. Divide the interest rate, any interest rate, into 72 and you get the number of years to double the debt or deposit. You can see how quickly things can get out of hand. This is a simplified way to see what banks use to determine total mortgages and loans. This is why you end up paying two or three times the purchase price of a house until your mortgage is paid for. This is why worldwide debt is growing exponentially and this is why it must continue to grow to pay back the compound usury.
Rule of 72
Exponential debt growth until the oil stops flowing.
Stop the loans. If they want the education bad enough they will work for it and in the process maybe appreciate it.
College is all about brainwashing people into socialism. It’s not about education anymore. Kids are better off going to a trade school and train for something in demand like HVAC, plumbing, electrician, etc. But a growing number of the kids are saying, “Oh no, that’s dirty manual labor. That’s beneath me.” I just recently heard a college graduate say that. I told him, “YOU don’t have SHIT beneath you if you’re cold, hungry, starving, homeless, etc., which is exactly what will happen to you if you don’t look at other options.” He just gave me the thousand-yard stare aka the DUH look and walked away. You reap whatever the hell you sow.
“It’s not about education anymore”
Never was- public schools were socialist monopolies from around 1837. Basic purpose, encourage submission [power] and above all else, BLOCK CLEAR COGNITION to keep the slaves from rebelling.
Around 1914, the head of Federal Office of Education said: “Now the question is raised- do the schools exist for the students, or do the students exist for the schools- the answer is the latter.”
All but open admission that “schools” exist to ENSLAVE. . .
Mebbe they coulda took a correspondence course for hall monitor from the back page of their Archie comic book?
On the one hand, I’m a little skeptical.
Most students under the age of 25 are getting hefty subsidization – if not all – tuition from their parent(s).
What I see happening is this PUSH to get students to take out these loans and hint, hint: “don’t say I told you but you can use the loans to party hardy.” They are even pushing this at community colleges where there is no tuition per se. There are enrollment fees, nothing that would require student loans with some careful budgeting.
But like, you know? Budget? We don’t need no stinkin’ budget. Totally.
Many claim victim status and victims aren’t responsible so keep the party going because, hey, I’m 34 and I’m just not going to pay back what I borrowed because it should be free anyway so I’m takin’ the money and voting Socialist.
Beware the useful idiots . . .
Ever notice that anything the federal government touches goes to hell in a hand basket? Ever since the federal government took over all school loans in March of 2010 schools have been on a tear of construction and students have been piling on debt.
And those loans are small shit compared to what immigrants are costing us, both legal and illegal! But that’s politically correct while “white kids” getting loans is not!
The cost of debt is nothing compared to the direct and indirect cost of the American obesity epidemic.
Fatbob Super Glide, 1200cc full size Harly , 6ft , 195 . Repr sleepr says . U need to watch your comments . U could find words like that to be painful .
When I graduated back in 2000, I left with 15k student loan debt. I paid it off in 3 years. Now granted, it wasn’t the exorbitant amount we see today of 100k plus, but the point being, I paid it off as soon as possible. I lived on scraps, but that was my priority until I was able to get it paid. No excuses. No fancy phones, no fancy computers, no fancy cars, just simple living.
I went back to school because I wanted to learn to become a paralegal, those pricks at the school were desperate to get me on finacial aid (re: get a loan), but I insisted I pay for everything. I refused to be in debt, I refuse to owe any kind of money to any corporate entity that will have my financial future by the gonads. Now I pay for everything with cash.
What they’re not teaching these millenials is fiscal responsibility and the repercussions of getting these loans and what it can do to you.
I am saving now to buy a land and home, I am NOT going to get a mortgage, I refuse.
In China they have a clever solution. If you want your debt cleared (and your social score increased, restoring your access to travel, nice restaurants etc.), then you have to perform a sex act online. Young women obviously get the biggest discounts and loan write offs.
In the process they now have no shortage of online material (which can be monitised), and the indebted students get help, and everyone is left happy!
The students make a contribution to the economy using what is essentially a renewable resource.