Servicing Debt

Student loan debt has become a discouraging problem throughout today’s economical foundation. “Overall debt is falling but student loan debt is increasing year-over-year and at a much faster rate,” chief executive David Stevens told The Washington Post. “[Young graduates] are already on the margin for being able to qualify for a mortgage. If you add on a

Problems in the student loan market are not just harming students but are also exacerbating problems with the United States’ recovery from the Great Recession. New York Federal Reserve Bank data has found that outstanding student debt topped $1 trillion in the third quarter of 2013, and the share of loans delinquent 90 days or more rose to 11.8 percent. Furthermore, the share of 25-year-old Americans with student debt increased to 43 percent in 2012 from 25 percent in 2003, while the average loan balance rose 91 percent, to $20,326 from $10,649 (Gage and Lorin). More than 40 million Americans are in student loan debt and because of this, more than 40 million Americans are not able to stimulate the economy as they are not able to buy houses or cars, or start businesses or families (Applebaum). In Wisconsin alone, student loan debt has resulted in a loss of over $200 million annually from new car purchases, while also resulting in middle class households with student loan debt overwhelmingly renting homes instead of owning them (Vanegeren).

1 Edward N. Wolff. “Recent trends in household wealth in the United States: Rising debt and the middle-class squeeze - an update to 2007,” Working Paper No. 589. Accessed January 13, 2013, http://www.levyinstitute.org/pubs/wp_589.pdf

Economic impact from rising student loan debt is being felt throughout the United States. According to research performed by the Pew Research Center and Rutgers, between 25-40% of 20- and 30-year-olds are delaying large purchases such as homes and cars (Daniels). The delay of such

Preparing for retirement is already stressful. If you did not start saving in your 20s and 30s, it can seem impossible to get enough of a nest egg together for a safe, stable retirement. Student loans hurt your Social Security check as well and can set you back. Thousands of retirees are now learning the hard way that student debt can threaten their financial stability as they enter their golden years.

When it comes to the data and methods, this study used the Federal Reserve Board’s Survey of Consumer Finances (SCF), which is a repeated survey that includes the information on household income and wealth holdings; the Federal Reserve conducts this survey every three years. To test the hypothesis there are

Student loan debt in the United States is expanding unrestricted each year. There are 36 million Americans today, holding over $740 billion dollars in student loan debt. (U.S. 2013) The current student loan system is intended to open doors to economic prosperity for those who could not otherwise afford to go to college. Research suggests that the unintended consequence of too much available student credit is real people losing prosperity and languishing in debt for extended periods of their lives. Reducing or eliminating the availability of student loans would have a tremendous impact on improving the lives of Americans. If things continue the way they are now, American’s will soon find college, and its implied ticket to economic

According to federal agencies, student debt is crushing the middle class. According to the author, “the debt is stopping a growing proportion of families form buying homes, saving for retirement, and making purchases that will keep our economy on the road to recovery.” Different financial crisis have caused families to use their savings and home equities, which is usually how some families help pay for

The Levy Institute: Recent Trends in Household Wealth in the United States: Rising Debt and the Middle-Class Squeeze: an Update to 2007 Statistics

One research looked at the effects that student debt has on college graduates and their chances of marrying after college. The researcher collected data by interviewing and survey college graduates. The participates were men and women who receive their bachelor’s degree in 1993. There were 9,410 participates who were all single adults after college. The researcher finds were that men and women differ when it comes to marriage and loan debt (Bozick,2014). In conclusion, man who are high in debt are less likely to marry after college than those who are lower in debt. Women are more acceptable to getting married, while having large sums of student loan debt which shows that man and women differed with marriage (Bozick,2014). Dwyer, Hodson, Mccloud (2013) research focus on how debt affects men and women differently and how they take different paths. Some men and women may go to college after high school, and some may jump into the job market. The researchers discovered that debt affects men and women differently when trying to pay off their debt. Men have it easier to pay off their debt, because more employers are willing to pick them over women, which put women at a disadvantage. Bozick (2014) also looked at the differences in men and women, but by looking at debt and marriage rates. He found that they’re also a difference on how debt affects men and women. His findings were that men are less likely to marry if he is high debt. Women are more acceptable to marry if she has high debt, compared to men. Both researchers concluded that men and women differ with it comes to

What do you think of when you hear the words college graduate? Well, in most scenarios, these words would be exciting to someone that just graduated college who have put in years of hard work and dedication to better educate and promote themselves for their future careers. Sadly enough, this is too far common not the case. In today’s society, students are graduating college with piles of debt at an alarming rate. With a troubled economy that is recovering from a recession and jobs difficult to come by for a lot of graduates with bachelor’s degrees, the student loan debt in the United States is bound to be a major crisis that could severely weaken and crimp the economy even more in the coming years.

Young adults from low-social economic statuses and middle-income backgrounds are more likely than their more advantage counterparts to turn to debt as a way to pay for college. Debt can be argued to become a very large burden for young adults from lower income and less educated backgrounds, as they have a high risk of carrying the burdens of having extremely high amounts of debt.

The average debt suffered by every 2013 college graduate was a staggering $35,200 (Roos p. 2 par 1). According to experts, this is the worst the economy has been in 80 years (Thompson, par 4). There are so many things working against the generation of today from an economical standpoint. The housing market crash of 2007-2008 took a toll on the economy as a whole, but in turn managed to affect millenials more so than any other generation. Throughout American history, every generation has had one of the same major goals; get rich quickly and be more prosperous than the generation before. Even today as the country has grown richer, Generations X and Y (people up to the age of about 50) have amassed less wealth than their parents had when they were the same age. If this is not harrowing enough, the average net worth of a person aged 29-37 has been lowered by 21% since 1983 while the average net worth of a person aged 56-64 has more than doubled since the same year. It is depressing to think that millenials will almost indefinitely suffer more instability in their retirements than their parents or even their grandparents (Lowrey, p. 2 par 5). Someone at the age of 30 in 2013 was worth 21% less than someone at the age of 30 in 1983, meanwhile the net worth of an average 60 year old in 2013 was more than twice as high as a 60 year old in 1983. In other words, young people are getting poorer as older people becoming richer

There is also the factor of everything being more expensive and interest rates being high on loans. It seems like a 3-year loan turns into a 5 or 6 year fast. Housing and rent used to be cheaper and its discouraging to even go out and rent on your own let alone must pay a mortgage and other house bills. Everything you need to live and have a decent life is more expensive and it seems like prices just keep going up. It’s not a lot but every little bit from here and there adds up and really dips into your pocket. As that pocket gets emptier there is less and less to be able to be saved. To even pay off medical bills or vehicle repairs. Once you have a bill like that happen now your back at square

“The average American owns 3.5 credit cards and $15,799 in credit card debt… totaling consumer debt of $2.43 trillion in the USA alone.” (Beckner). Debt forces many people into depression and worrying lives. People struggle to discover happiness through financing goods, but struggle even more to find a way out of debt. Through consumerism, people lose their finances in department stores, car dealerships, and much more. Most of the possessions people buy with credit cards become impractical within a few months. The void they search for is never really filled. Consumerism is just a way to get the economy going, without thinking of a person’s individual finance