- By comparison, mortgage debt is 68 percent of total debt, down from 73 percent during the same period. The household debt figures are not adjusted for inflation.
Student borrowers today owe $1.3 trillion, more than double the $611 billion owed nearly nine years ago. About one in 10 student borrowers is behind on repaying the loans, the highest delinquency rate of any type of loan tracked by the New York Fed’s quarterly household debt report.
The student loan market is nowhere near the size of the $8.6 trillion mortgage market, making student borrowing less of a threat to the global financial system than the bad housing loans that touched off the financial crisis in 2008.
You can foreclose on a house. You'll get a market rate for it, less whatever inconvenience pricing you get for the foreclosure auction, lack of capital etc.
You can repossess a car. You'll get half what it's worth or less because unlike real estate, durable goods are depreciating assets.
Student loan debt? three cents on the dollar. And that's in a good market. Start seeing a lot of it and that recourse price will plummet.
It's been suggested that the market for the past six months has been buoyed up by the promise of Trump tax cuts. We've gotten to the point where any Republican agenda over the next 12 months at least is likely to be mired in scandal. And granted - we had crazy-high interest rates following Watergate which gave investors alternative investment vehicles, but this is how that market period ended:
50% correction over 5 years.
You think your parents/grandparents are gonna retire with their IRAs and 401(k)s at 30% or more down? They didn't last time. That's why millennials have the highest structural unemployment of any generation since the Great Depression. How's your student loan debt looking now?
It's good, thank you, down to about 7 or 8k. I've got a decade-old Honda that I 100% own, and a few 10's of k in a pension that I can't touch without ~33% tax penalties. Fuckin' bring it! Just kidding, I have a conscience.How's your student loan debt looking now?
Yeah, not only is it an uglier kind of debt, but it's on younger shoulders and they simply don't have the earning potential. This debt is not going to be paid off. It's going to be inflated away, or something else, but it's not going to go away via monthly payments.
Pardon my incredulity, but you still had student loans? In my eyes, you're an older middle aged gentleman with skills. Was that not enough to ameliorate your student debt? Or was it just simply that onerous? I say this in the spirit of solidarity. As in, what hope do my peers have (I'm 25) when student loans still afflict older, much more established people to the degree where a gift that extinguishes said debt constitutes the most meaningful gift you could receive?
Thanks for the compliment, but my situation is not at all unique in my peer group. Most people I know are still making student loan payments, actually. People making six figures. For me the situation is a bit different, since I didn't actually go to college until my late 30's. Then realized I hated the industry, and went off and started my own business, and then the economy tanked, and I defaulted for years and ... yeah. It went on and on and on. The student loan payment system is designed to make it difficult to pay off. If you over pay, they play games with the extra money, instead of applying it to the principal. If you lose your job and miss a few payments, they sell your debt to a debt collector (who is actually the same company, just a different office) and add thousands of dollars to the principal, effectively increasing your debt right at the time when you can't pay. Etc. Eventually, their games break your will to fight, and you just pay your monthly payment via auto-pay, which is designed to ensure the loan lasts far longer than it needs to. So, say $200/mo leaves your account automatically on the 15th of every month, and will until you are well into your 60's. Possibly longer. There are two types of people who get their student loans paid off quickly: Those who come into some sort of cash windfall (death of a relative, or whatever), and those who monomaniacally focus on learning every detail of the byzantine internal operations of SallieMae (or whatever the company is called nowadays) and pore over every single monthly statement and bill, and make regular calls to the company customer service department demanding that the extra payment they made gets applied to the principal and not the interest, and ... it tires me just to think about it. Pissing away a couple hundred bucks a month on a shady bunch of fucksticks empowered by the Federal Government and the politicians that despise you, is all part of becoming an adult. Sorry.
Fuck. Fuck! FUCK! You are seriously bumming me out duderino Most people I know are still making student loan payments, actually. People making six figures.
The student loan payment system is designed to make it difficult to pay off.
Pissing away a couple hundred bucks a month on a shady bunch of fucksticks empowered by the Federal Government and the politicians that despise you, is all part of becoming an adult.
Oh... and when they increase your debt right at the time you are least able to pay it (when you are unemployed)? Yeah. Bankruptcy doesn't help. Sallie Mae has protected student debt from bankruptcy protection. So even if you go bankrupt (I have many friends who have), the day after you get out of court, having lost all of your belongings and job... there's a bill from SallieMae for your student loan payment in the mailbox. Due in 30 days.
Multiply your history by a hundred million. That's this country. It's ridiculous. I'll take this moment to plug my idea for a solution. A (non-compulsory but highly encouraged) service program, wherein 18 year olds spend a year or more in service to the country doing all the work that needs doing--caring for the elderly, daycare and education services, infrastructure improvement and development, etc.--and in exchange, you get free tuition at a public university. What do you think?
The WPA Program was kinda like this. And many countries have compulsory military service. I think every American should spend maybe 18-20 in public service, and earn a basic wage. Let them go crazy when the crazy is most crazy, and make them do good honest work for their fellow man. Then let them loose in the workforce, better human beings.
Lol. I'll start at the "laboratory of democracies" level first. See if Maryland is up for it. Hopefully that will mitigate some Republican hostility.
It's hard to look at this soberly and not sound melodramatic. The middle and lower classes are unwitting sled dogs, with new and scarier whips designed each day to separate them from their meager incomes. Add to that the most expensive healthcare system in the world providing--depending how you measure it--healthcare at parity with Slovenia or Costa Rica. And god forbid you try to point them towards a political solution that distributes risk and cost, you'll find them sprinting to the polls to elect a gold-plated nitwit. (Also, anytime it's over 90° outside, I'm reminded that Antarctica is melting.) Positives. What are the positives? With all this data being made available to the public, we're seeing a huge push in statistical analysis, i.e. Raj Chetty's Equality of Opportunity work or Steven Pinker's Better Angels. That's heartening.