$1 trillion student loan debt widens US wealth gap
Source: ASSOCIATED PRESS
Every month that Gregory Zbylut pays $1,300 toward his law school loans is another month of not qualifying for a decent mortgage.
Every payment toward their student loans is $900 Dr. Nida Degesys and her husband arent putting in their retirement savings account.
They believe theyll eventually climb from debt and begin using their earnings to build assets rather than fill holes. But, like the roughly 37 million others in the U.S. saddled with $1 trillion in student debt, they may never catch up with wealthy peers who began life after college free from the burden.
The disparity, experts say, is contributing to the widening of the gap between rich and everyone else in the country.
Read more: http://www.salon.com/2014/03/27/1_trillion_student_loan_debt_widens_us_wealth_gap/
PasadenaTrudy
(3,998 posts)that I'm not young, didn't have kids, and didn't get sucked into the mainstream mentality of making the accumulation of wealth my goal.
Signed,
art history BA degree holder
Lars28
(84 posts)But society is still eating its young.
Psephos
(8,032 posts)We have a serious issue affecting the future lives of millions of young people, due to immorally high college costs. The solution lies in thinking beyond our private circumstances.
Food for thought, by the way. If everyone remained childless, Social Security, Medicaid, and for that matter, the US Government would go bankrupt.
I am childless myself, but the demographics are hard cold facts.
PasadenaTrudy
(3,998 posts)It's terrible out there. I didn't mean to sound smug...
I'm glad to know that some people have managed to do ok despite our looming troubles. Good on ya.
liberalmike27
(2,479 posts)At State universities. They should forgive this debt.
adigal
(7,581 posts)I won't happen.
taught_me_patience
(5,477 posts)The article is negating the fact that student loans are used to build "assets". The "asset" is your education, which is typically worth $1MM and up over a lifetime of earnings.
cyberswede
(26,117 posts)...every little bit helps, I guess.
I'm worried about how much college is going to cost for my kids (ages 13 and 11).
CFLDem
(2,083 posts)This is what saved my bacon this tax year!
mike_c
(36,281 posts)...because I mortgaged my future 20+ years ago to get an education. My only hope, at this point, is that Congress changes the law and gives me some way out of debt before I retire. Nearly 20 years of monthly payments and the principle on my debt has only declined by a few percent. I won't live long enough to repay it, let alone work long enough. My greatest hope was that Elizabeth Warren would make student loan debt a crusade when she was elected to the senate, and change the exploitative laws. Now I'm less sure that will ever happen.
Yo_Mama
(8,303 posts)In 2010 the government took over the student loan business, and now most of that trillion is owed to the taxpayers. Who is going to vote for forgiveness, when that means we all have to shoulder the debt.
I've been brooding about this since it happened!
handmade34
(22,758 posts)my student loan debt dies with me and my kids won't be responsible ...(they are still paying on their own)
KansDem
(28,498 posts)Not so much anymore, as expressed in this statement from the article: If you graduate with a B.A. or doctorate and you get the same job at the same place, you make the same amount of money, said William Elliott III, director of the Assets and Education Initiative at the University of Kansas. But that money will actually mean less to you in the sense of accumulating assets in the long term.
However, Dr. Nida Degesys can look forward to an average salary of $187,200 for "physicians and surgeons."
Occupational Outlook Handbook
And Gregory Zbylut, Esq., can expect to make $113,530 for "lawyers."
Occupational Outlook Handbook
So they're in a better position than most with promising, successful careers that will (eventually) pay off their student loans.
However, this comment caught my eye: "...they may never catch up with wealthy peers who began life after college free from the burden." Yeah! How many of you debt-laden "professionals" have graduated with school chums who went on to very successful careers? And do you still keep in contact with them? When you get together every so often are you able to keep up with stories of Alaskan cruises or trips to Europe or South America? Are you able to share in the joys of owning a new BMW or Lexus? And when you do get together, do you go to their four-bedroom, three-bath house with den, deck and three-car garage, or do they come to your two-bedroom, one-bath residence with back-door and carport? (or are you still in an apartment?)
Not much leeway if you "invested" a ton of borrowed money in a college degree only to find yourself working crap-ass jobs that has nothing to do with your field of study and barely covers expenses.
On a related note: A fun movie to watch is Friends with Money If you have enough in the bank this weekend, grab a pizza and a six-pack and enjoy!
adirondacker
(2,921 posts)CFLDem
(2,083 posts)It's completely ridiculous. Student loans should be treated like any other personal loan.
Although ideally they could be made obsolete by free/generous gov't subsidy. Control program costs by raising college entrance standards and balance opportunity fairness by siphoning students who fall short of college eligibility into vocational programs instead.
msongs
(67,462 posts)Psephos
(8,032 posts)A lot of 20-year-olds have not yet grasped the danger of entering huge loans without knowing whether they can repay them. The colleges all push the loans to feed their juggernaut budgets, while they tell the kids that their 100K, non-dischargeable loan is an
"sound investment."
A 20-year-old who skips college and puts 100K in actual investments instead will be a multimillionaire before 50. Think about it. It's insane and immoral what we're doing to college kids now.
We're putting way too much financial burden on kids who've never made a huge financial decision on their lives.
The whole scam is disgusting.
closeupready
(29,503 posts)handmade34
(22,758 posts)ileus
(15,396 posts)our second time paying off my DW's student loans. I finished 4 years without owing a dime...in 93.
LiberalEsto
(22,845 posts)less than 4 years on the other daughter's private loan and less than 3 years on her smaller federal loan.
I feel so frustrated because neither daughter finished college -- in fact they both dropped out of several colleges. Neither one has the qualifications to earn her own living. Both developed mental health problems in their early 20s, although not severe ones, fortunately.
We've been paying the loans off, one after another, for about 9 years. If we had known that we would get stuck with all the payments by co-signing the loans, we would have insisted they attend community college and earn the money to pay for it themselves.
I'm 62 and my husband is 57. This would have been our savings for retirement.
nitpicker
(7,153 posts)I know someone whose adult child developed mental issues and eventually suicided.
"Fortunately" the outstanding student loan debt was federal and eventually forgiven.
BUT that was an ordeal and mess.
LiberalEsto
(22,845 posts)How sad for the family
grahamhgreen
(15,741 posts)CFLDem
(2,083 posts)But students and parents are too busy paying their lobbying money to the same institutions that lobby for their debt slavery.
It's like paying for your own bullet.
Morganfleeman
(117 posts)There's very little reason for schools to cut costs. There is no incentive at all in fact because the tuition is subsidized by the taxpayer with no strings. There is no good reason why educational costs should have outstripped all other forms of inflation by the margin it has over the past 20 years. Certainly, it's demand driven, but much of that demand is artificial due to no questions asked grants and loans without placing any honus on the schools to contain costs. I graduated from law school 11 years ago when tuition was $23k a year. Now it's $50k for the same school. Has the quality of education really doubled in that time? Probably not.
And how about stopping the absurd taxpayer subsidy of diploma mills like the University of Phoenix and other for profit institutions which have abysmal job placement rates and high default rates?
NobodyHere
(2,810 posts)I'm in college and yesterday we got the results of a test back. I personally got a 95% so I was happy. However then the teacher announced that the class average was considerably less than 70%. That means several people probably failed the test. It makes me wonder how those people are paying for the class. I mean if they fail the class(and it isn't too demanding a class) they still have to pony up money for tuition. If they're being financed by loans they still have to pay them back.
I'm glad I have the GI Bill, I don't have to pay for a class unless I fail it!
DeSwiss
(27,137 posts)...should join together and form a bank. That way they won't have to pay any of it back.
- They can let the ''taxpayers'' (great-grandchildren) do it like we always do......
K&R