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October 27, 2004 Generation Broke
The report, "Generation Broke: The Economic & Political Lives of Young Adults", was released yesterday by Demos, an organization which despite its name is in fact not Democrat, but rather a nonpartisan, non-profit New York public policy group. The PR Newswire reports, The economic security of younger Americans is eroding at an alarming pace as a result of slow wage growth, underemployment, rising costs and mounting student loan and credit card debt, according to a new report, "Generation Broke: The Growth of Debt Among Younger Americans," released today from Demos, a non-partisan, public policy group based in New York City.Now that won't preach. Oh but there's more. "The report finds that major costs associated with adulthood that begin to mount between the ages of 25 and 34 -- such as housing, child care, and health care -- have all increased dramatically over the past decade. Coupled with rising unemployment or under-employment, slow real-wage growth, and sharp tuition hikes that have led to larger student loans, a massive debt burden has been unleashed on America's young adult population."Did I mention that my friends and I sit down and commiserate around our college loans? Yes, it's that bad. When it comes to getting any type of financial aid for college, it pretty much stinks to be middle class. Take my words with a grain of salt as no one twisted my arm behind my back and made me choose a university with $36,000 a year tuition. My parents made too much for me to get an extra large chunk of financial aid. Unfortunately, I grew up in that la-la land reality world where everyone is under the insane impression that their parents have some secret grandios college fund saved up for them. Every time I asked my parents about my "college fund", they pointed to my private school bills and my 81,000 after school activities. To even think that I was getting a free ride, was surely entertaining illusions of grandeur. Meanwhile, I apparently wasn't smart enough to land one of those fabo full-ride scholarship dealies and so to supplement what my over-priced college wasn't giving me in financial aid, I followed the traditional route and took out college loans. As of today, I strongly dislike Fannie, Nellie, Sallie and the entire Mae family. Let's just say, I wouldn't have them over for dinner. Check out some of the statistics found in the study:
Of course studies like "Generation Broke" are usually void of any tangible solutions to the problems they expose. As for the heavy credit card marketing campaigns to college students, the motivation there is purely evil. No one is held accountable these days. My younger brother started getting credit card applications when he was 14 and couldn't even hold a job. Still, I'm inclined to think that we set-up young adults for failure when we induce debt so young. Unfortunately, our current economic and educational structure doesn't support the belief in that last assertion. Does anyone? Comments Posted by: Sarah Schreffler at October 27, 2004 6:50 AM I'm a little stunned by their figure of the average student loan balance of only $18,000. Where did they get those figures!!! In my close ciricle of friends we have about 4 times as much student loan debt. If you consider the cost of private undergraduate education, that debt is about 2 times greater than that. Add a graduate education, and you have student loans balances that are close to that of a mortgage for a modest starter home in Midwest. While I don't regret my education, I wish I would have truly realized the cost of it. Posted by: nappi at October 27, 2004 8:18 AM Seriously. What's sad is that people are forced into jobs they would not choose for themselves b/c of financial concerns. I've had so many problems. The massive loan debt that service professionals such as doctors and lawyers carry is absurd though. In other countries, they take their top students and educate them for free, and, well you see their health care system vs. ours. Posted by: Chrissy at October 27, 2004 8:20 AM "If you think education is expensive, try undereducation." I wouldn't mind it being so high if it just meant more in the open market. It really doesn't count for as much anymore, and the quality seems to have diminished. But at least Yale only turns out geniuses. Posted by: Brian C at October 27, 2004 10:14 AM Here is another bomb for ya. Contrary to the major mainstream media opinon, a lot of college graduates are not finding jobs...anywhere. McDonalds...at least where I live do NOT hire them. And I don't see any of them working at the mall either. But check out your local plumber, car repairman, hair salon owner, and even garbage collector (after they are promoted to garbage truck driver). These folks are making good money and benefits...including the head custodians (now called plant engineers) in many school districts. Plus if they work for the city, their jobs are more secure. It distintegrates a society IMO to demean these people. They work hard and contribute as much as anyone else. Let's see what would happen without them. Your toilet would be overflowing, your hair a mess, your car wouldn't run, the streets and homes would be overflowing with garbage, and the school campuses would have an army of flies all over the garbage and food remnants from the students' lunches. I say we need another outlook here. Posted by: Diane R. at October 27, 2004 10:47 AM Here is another bomb for ya. Contrary to the major mainstream media opinon, a lot of college graduates are not finding jobs...anywhere. McDonalds...at least where I live do NOT hire them. And I don't see any of them working at the mall either. But check out your local plumber, car repairman, hair salon owner, and even garbage collector (after they are promoted to garbage truck driver). These folks are making good money and benefits...including the head custodians (now called plant engineers) in many school districts. Plus if they work for the city, their jobs are more secure. It distintegrates a society IMO to demean these people. They work hard and contribute as much as anyone else. Let's see what would happen without them. Your toilet would be overflowing, your hair a mess, your car wouldn't run, the streets and homes would be overflowing with garbage, and the school campuses would have an army of flies all over the garbage and food remnants from the students' lunches. I say we need another outlook here. Posted by: Diane R. at October 27, 2004 10:48 AM I have 0 debt and perfect credit. That's the benefit of going to a school that costs $7000/year instead of $40,000. We (Christians) are to be lenders and not borrowers. Furthermore, the wealth of the wicked is stored up for the righteous..I live on these principles. Posted by: Alex at October 27, 2004 10:58 AM Sarah: You make a good point. My loans are in my name. I forked up a good amount on my own education and we do always value what we pay for. But I think if parents are willing and want to finance undergrad for their children, that's a tremendous blessing as well. The onus is really on the parents to ensure that a free education is valued. It's possible. I've seen it done. As for graduate school, I think people should be on their own to figure out to pay for that. Nappi: Agreed, those figures are low. I've heard some doozies. One person I know has close to $70,000 alone on undergrad. Hello house down payment, AND some... Chrissy: And the average starting salary for a medical resident is a mere $30,000. Yeah...that should put a nice dent in that $250,000 medical school loan. I see why people go through the military. Alex, you wanna co-sign with me on my mortgage then? But you make very good points about where Christians especially need not be--debt. Diane: You're speaking my language. I agree we've mis-classified service type positions. It's amazing. A few months ago I wrote a piece on this very subject. Brian: Yalies are little smart aleks I must say. Posted by: Ambra Nykol at October 27, 2004 1:02 PM Alex: My husband and I have been convicted of this. Since March (when we were married and made the determination to be free of consumer debt) we have paid off 1 of our cars and 2 credit cards. And are working rapidly on the rest. There is a freedom to being debt free. Freedom to make less without worrying about how to pay the bills. Freedom to get up and move -- some missions boards (Wycliffe, for one) will not take someone that has ANY debt (including a house loan) My sister and her husband have been debt free for 8 years now. They bought their current home with cash and their van. They have three kids, he works in construction and she's a stay at home mom. So it IS doable. (Okay they went into debt when my nephew was born a year ago and had to be air-lifted to Houston, where he was in NICU for 6 weeks. I believe they are out of that now too. But that's a wee bit different from going into debt for things) The financial seminar we went to even showed how one can use the "7 year rule" to buy houses, pay them off MUCH faster than one would ever think possible, and then "trade up" (Sell one house to get a downpayment off the next) and basically end up having house loan for much less time than otherwise. Posted by: Sarah Schreffler at October 27, 2004 1:19 PM A college education is relatively cheap in NC. Or was when I was growing up, and provided your a citizen. I had the GI Bill to help offset the cost and near the end had to take out a few loans but they were small and have already been payed off. Its a nice feeling getting that debt from over your head. As for credit cards. Never got one until after I turned 30. And I don't put anything on them I couldn't alreday pay for. Its more of a convenience thing for me right now. Posted by: Ray Phelps at October 27, 2004 1:34 PM Ray it looks like you're in a great position. No credit cards until age 30? That's fabulous. Posted by: Ambra at October 30, 2004 1:03 AM $24K/year. That's the cost of education at my kid's college. The top schools on her list, offered no help based on grades/scores (91.2/100 over 4 years beat her old man). They offered school loans. $24K/year. And we had a STRONG talk about turning down the credit card offers. I pray that it sunk in. The schools that offered cash, didn't have the programs she wanted. Posted by: DarkStar at October 30, 2004 1:28 PM Find a plumber in your area Posted by: plumber at February 7, 2005 4:01 PM |
 "...playful philosophizing" Dan Leroy, National Review Online
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A recent study has proven what I've long lamented from the rooftops: getting a college education in this country is sending young adults to the poorhouse.
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The only way I finally paid off my school loans was by paying it off with a bank loan and then paying off the bank loan.
Because it didn't matter how much money I paid "over" into my school loan, the principal on the loan never seemed to go down. And the loan people did NOT give me detailed "how much you owe" and "where your money went" breakdowns like I was getting on other loans (Including my house as it turned out) and when I tried to get them to send me a breakdown of where my money was going, it was like pulling teeth to get it (it took MONTHS for them to make -- no kidding! That's outrageous) And I finally decided I'd rather pay a higher interest rate and be sure that my loan was actually being paid off.
I don't like those student loans at ALL. I don't like their policies. And EVERYONE I know with one has had problems paying it off entirely. Dealing with the companies, etc. Because they seem to think you can't go anywhere else. You can.
Oh, and btw, I don't think parents should pay for their children's college educations. I think people value what they pay for themselves. I know that when I started actually valuign my education was when I was paying for it myself.