24% Of Millennials "Expect" Student Loan Forgiveness
Submitted by Tyler Durden on 11/13/2014 10:10 -0400
It appears the concept of no consequences is now deeply embedded in the
American society. As Student loan debtloads surge ever higher - and opportunities
grow ever lower - NBC News reports a rather stunning 24% of Millennials said
they expect their loans will ultimately be forgiven, according to study released
Wednesday by Junior Achievement and PwC US. That helps to explain why
delinquency rates are at record highs - aside from the massive debtloads and no
high-paying jobs - as students see bankers rigging every market in the world with
little to no consequence, one can only imagine the lessons being learned.
Heavily delinquent student loans hit a fresh record high of $124.3 billion, up
from $121.5 billion in the prior quarter.
As NBC News reports,
That could be a lot of accumulated debt, considering the average amount of
cumulative student debt for undergraduates in the class of 2012 was $26,885,
according to a recent Pew Research report. The average debt for 2013 graduates
is expected to be even higher.
"It's a scary statistic," said Jack Kosakowski, president of Junior Achievement,
which co-sponsored the Ypulse survey. The survey conducted for Junior
Achievement, "Millennials & College Planning," did not address why the students
thought their loans would be forgiven, and it was the first year the question was
included in the survey.
The report also found that 60 percent of millennials surveyed said financial aid is
a deciding factor in their school choice and 21 percent said the cost of college
was their family's main financial problem.
* * *
Given the following, it is hardly surprising they hope and expect for
forgivness...
The following are 18 sobering facts about the unprecedented student loan debt
crisis in the United States…
#1 According to the Wall Street Journal, the class of 2014 is “the most indebted
ever“…
As college graduates in the Class of 2014 prepare to shift their tassels and accept
their diplomas, they leave school with one discouraging distinction: They’re the
most indebted class ever.
The average Class of 2014 graduate with student-loan debt has to pay back some
$33,000, according to an analysis of government data by Mark Kantrowitz,
publisher at Edvisors, a group of web sites about planning and paying for college.
Even after adjusting for inflation that’s nearly double the amount borrowers had to
pay back 20 years ago.
#2 In 1994, less than half of all college graduates left school with student loan
debt. Today, it is over 70 percent.
#3 Approximately 15 percent of graduate and professional school students leave
school with student loan debt balances in the six figures.
#4 At this point, student loan debt has hit a grand total of 1.2 trillion dollars in the
United States. That number has grown by about 84 percent just since 2008.
#5 According to the Pew Research Center, nearly four out of every ten U.S.
households that are led by someone under the age of 40 is paying off student loan
debt right now.
#6 The median net worth of young households that have student loan debt is 20
percent lower than the median net worth of young households that do not have any
student loan debt and that are led by someone with only a high school education.
#7 Among college educated people, the median net worth of young households that
do not have student loan debt is seven times higher than the median net worth of
young households that do have student loan debt.
#8 In 2008, approximately 29 million Americans were paying off student loan
debts. Today, that number has ballooned to 40 million.
#9 Since 2005, student loan debt burdens have absolutely exploded while salaries
for young college graduates have actually declined…
The problem developing is that earnings and debt aren’t moving in the same
direction. From 2005 to 2012, average student loan debt has jumped 35%,
adjusting for inflation, while the median salary has actually dropped by 2.2%.
#10 According to CNN, 260,000 Americans with a college or professional degree
made at or below the federal minimum wage last year.
#11 Even after accounting for inflation, the cost of college tuition increased by 275
percent between 1970 and 2013.
#12 Debt for law school students has risen dramatically over the past decade or
so…
J.D.s certainly don’t come cheap. It’s almost unheard of to attend law school
without taking out significant loans. What’s more, the average debt load is
mounting: in 2001-2002, JDs borrowed on average $46,500 at public law schools
and $70,000 at private law schools; by 2011, those numbers rose to $75,700 and
$125,000, respectively.
#13 Last year it was being reported that 34.9 percent of all student loan borrowers
under the age of 30 are at least 90 days behind on their student loan payments.
#14 One survey found that 27 percent of those with student loan debt moved back
in with their parents after college.
#15 Another survey found that 70 percent of all college graduates wish that they
had spent more time preparing for the “real world” while they were still in school.
#16 Student loan debt is causing many young Americans to delay getting
married. The following is from a recent NBC News article…
While there is no specific data on student debt-related delays to marriage, a recent
study by the Pew Research Center shows that a record number of Americans have
never married. The study found the median age at first marriage is now 27 for
women and 29 for men. In 1960, the median age was 20 for women and 23 for
men.
#17 Many Americans are not even using most of their student loan money to pay
for college. Instead, many are using much of that money to pay bills or stock the
fridge…
Take Ray Selent, a 30-year-old former retail clerk in Fort Lauderdale, Fla. He was
unemployed in 2012 when he enrolled as a part-time student at Broward County’s
community college. That allowed him to borrow thousands of dollars to pay rent
to his mother, cover his cellphone bill and catch the occasional movie.
…
Tommie Matherne, a 32-year-old married father of five in Billings, Mont., has
been going to school since 2010, when he realized the $10 an hour he was
making as a mall security guard wasn’t covering his family’s expenses. He uses
roughly $2,000 in student loans each year to stock his fridge and catch up on bills.
His wife is a stay-at-home mother who also gets loans to take online courses.
“We’ve been taking whatever we can for student loans every year, taking
whatever we have left over and using it to stock up the freezer just so we have a
couple extra months where we don’t have to worry about food,” says Mr.
Matherne, who owes $51,600 in federal loans.
Some students end up going deeper into debt. Early last year, when Denna Merritt
lost her long-term unemployment benefits, the 49-year-old Indianapolis woman
enrolled part-time at the Art Institute of Pittsburgh’s online program, aiming for a
degree in graphic design. She took out $15,000 in federal loans, $2,800 of which
went to catch up on unpaid bills, including utilities, health-insurance premiums
and cable.
“Obviously, it’s better not to use it that way if you can help it, because you’re just
going to owe that much more later,” says Ms. Merritt, a former bookkeeper.
#18 Only 28 percent of Americans know that the U.S. government can garnish
wages and withhold tax refunds if student loan debts are not repaid.
It should come as no surprise that the delinquency rate on student loan debt in this
country is far higher than the delinquency rate on mortgages, auto loans and credit
card debt.
This is a financial bubble that gets worse with each passing year, and if we
continue on our current course it is going to end very, very badly.
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http://www.zerohedge.com/news/2014-11-13/24-millennials-expect-student-loan-forgiveness