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Student Loan Debt Has Nearly Tripled (npr.org)
An anonymous reader shares a report: Recent college graduates who borrow are leaving school with an average of $34,000 in student loans. That's up from $20,000 just 10 years ago, according to a new analysis from the Federal Reserve Bank of New York. In that report, out this week, the New York Fed took a careful look at the relationship between debt and homeownership. For people aged 30 to 36, the analysis shows having any student debt significantly hurts your chances of buying a home, compared to college graduates with no debt. The cliche of "good debt" notwithstanding, the consequences of borrowing are real, and they are lasting. The report paints a mixed picture of how student borrowing has evolved over the last decade, since the financial crisis. There are some bright spots: For example, student loan defaults peaked five years ago and have declined ever since. And repayment seems to have slowed down among high-balance borrowers -- those who owe $75,000 or more. Meaning, after 10 years, they have paid down only one-quarter to one-third of what they owe.
< life story >
I went to a public/private university. Tuition was >40k$ / year. I was able to get 25k in grants and scholarships, but that left me and my parents with a 15k gap.
As my parents had shit credit, they couldn't help co-sign any loans. I had to get an extended family member to help.
After the first year, I couldn't afford it. Flat out.
So I dropped out after one year. No degree. Entered the minimum wage workforce making 8$/hr as a line cook. Worked my way up to Assistant Manager with... $9.50/hr...
Two years later, two shit cars later, and countless roommates later. I lost my job. My father was working as a Project Manager for a nationwide networking company. He helped me land a part time gig that paid 25$/hr but hours ranged from 0 to 30 a week depending on what projects he could help me get on.
But it took nearly 6 months before I was handed that part time gig... I also went to craigslist and worked landscaping when I could, making 10$/hr. However, during the next year, and the flaky hours, I was evicted from my apartment, and I defaulted on my student loans (yes I used all the deferred time (whatever it was really called) I could)... At this time the amount was ~10k.
Before I went into default, I knew exactly how to pay back my debt, I go to a website, enter in the amount, bank account info, done.
A couple years later I found a Software Developer position making ~45k/year. Trying to get my credit back on track, I went to research how to start paying back my debt. This was the most difficult process I could imagine. How can it be that hard to find out who you owe money to?!
A couple months later I finally figured it out, but saw that they charged enough fees for the amount go back up to the original 15k!!!! WHAT?!
Every step of the way in trying to pay back my debt, I stumble on some problem or another. Medical bill, car repair/inspection/registration, roommate leaving without notice leaving me with 2x rent.
</ life story >
I'm am incredibly happy that debtors prison is outlawed, but it seems they have just morphed it into this obscene beast that just eats anyone and everyone dumb enough to fall for this popular fallacy of graduating HS, going to college for 4 years, then landing a job that can help pay back ur debt and life style.
Now, before all you red-wing nuts say "Don't live beyond your means, get a better job, blah blah" I did all of that. Sold my car, rode public transport, lived in a 2 bdrm apartment with 6 other dudes, moved back in with my parents for a while, etc... I did everything I could to save every penny I could... still wasn't enough.
Student debt is today's slavery.
And you know what? Of my group of friends, I'm considered one of the more fortunate ones... Another friend of mine is over 100k$ in debt... And he's currently unemployed.