Debt And Dealing With Stagnant Wages

While this is often true, it can create problems when a student does not have the money to pay for a quality education. The cost of college has risen an estimated 250-500% over the last 30 years while consumer price index has only increased by 115 percent during the same time frame (White, 2015; Eskow, 2014). The amount of student loan debt is increasing, along with the cost of college. The income of many young people today cannot keep up with the rising costs of college education and housing. Part of the problem with student loan debt begins when students choose to attend a college that exceeds their financial resources and rely on federal student loans as well as private student loans to make up the difference. Eskow found that even public colleges and universities are becoming difficult to pay for without taking out student loans often averaging $30,000 for tuition, room, and board (2014). Since many people do not have enough money to cover college education expenses, they rely on student loans, both federal and private, to fill the gap. Financial advisor Ramsey stated that often the loans students take out pay “for an off-campus standard of living, and no debt was needed to get the degree” (2013). “The Project on Student Debt reported in 2013 over ⅔ graduating seniors were leaving school with student loans” averaging approximately $28,400 (White, 2015). Taking on almost $30,000 in debt before even starting a career can have a significant impact. It can force people to get a job just to pay off the student loans, not based on what they got an education for prepared for or what they studied. This also can cause a setback in future plans, having to delay many adult milestones due to lack of

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

Credit cards have become increasingly popular world-wide, making it easier to buy now and pay later but are they actually helping or hindering someone’s credit? “Maxed Out” by James D. Scurlock demonstrates how credit cards can hurt someone’s credit, while “Why Won’t Anyone give Me a Credit Card” by Kevin O’Donnell demonstrates how someone may have financial stability to pay off a credit card, but still be consistently denied one by the credit card companies. Owning credit cards is not the problem; the problem is being irresponsible with it.

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).

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

As many would be led to believe, student debt affects the vast majority of young people in this country. According to Daniels, seventy percent of students who have recently graduated are now considered to be under the category of borrowers (2015). In relation to the population, that is a total of forty million people (Daniels, 2015). Unfortunately, many of these students are reaching the point of possibly defaulting on the loans they have accumulated (Daniels, 2015). Although students are now being educated about being very careful when taking out loans, many do not have a choice. Student debt seems like a nonstop revolving door for us young people. The sum of the student loan debt that the population of forty million Americans has is a total of $1.2 trillion in college debt (Student-loan debacle, 2014).

As Young teenagers become adults and start College, one issue that doesn’t seem as a big deal at the moment for many students are student loans. Young college students who don’t have the money, don’t have enough scholarship money, or family who doesn’t have the money to pay, will apply for student loans each year. They amount the student receives can vary depending on the college and what the student has achieved academically. Though interest rates are low with subsidized being 4.29% and unsubsidized being 5.84% ("Federal Student Aid" Interest rates and Fees), student loans still have a huge effect on college students once they graduate. One college graduate’s story helps explain the struggles for most students:

But the student loan debt crisis has far reaching implications for our economy. Young adults who finish college burdened with debt hold back on purchases that were once common for young families, like buying cars and houses—things that make our economy stronger and our middle class more secure.

Rising college prices have made in nearly impossible for young americans to live without debt for most of their lifes.

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

Students are graduating with an enormous amount to debt. This is a perfect reason to stop marketing credit cards on college campuses. The average outstanding balance on graduate student credit cards is $8,612, an increase of 10% from the 2003 average of $7,831 (Nellie Mae, 2007). This shows the trend that students are graduating with more debt than just their student loans. Students should not be worrying about any other debt after graduating. With credit card companies preying on students on campus, students will get these credit cards and ruin their financial future after college. Students which are 4 year undergraduates that borrow to pay their education, graduate with an average debt of $24,651 according to The Smart Student Guide to Financial Aid on www.finaid.org. That total with the average credit card debt equals $33,263, which is double the annual income of a minimum wage worker in the state of Maryland. Students will more than likely make less money a year than the total amount of debt they accumulate in college. Why then have credit card companies on campus dimming the potential light these students

First of all the time period that millennials are growing up in is affecting how other generations look at their work ethic. From worldwide layoffs, soaring divorce rates, war, and unemployment, millennials have been through a lot already in their life for being so young. The unemployment rate and the increase of the cost of living is hitting this generation the hardest, it’s the main reason why young adults are still living with their parents. Young adults are most affected by the unemployment rate in general, which makes times primarily hard. In fact, in one report they found that, “Many Millennials couldn’t work right now if they wanted to. According to the report, 37% of 18–29-year-olds are unemployed or out of the workforce, the highest share among this age group in more than three decades” (Williams). Work ethic is difficult to define when so many are unemployed, after the recession hit in 2008 it has been especially hard to find a job. Although the economy is healing and people are starting to find more work opportunities, times are still strenuous. For some it can almost seem impossible to try and save money for college to get a job that can support the cost of living in this day and age. If anything millennials work ethic is strong, this generation isn’t just sitting around and waiting for a job to come to them. In order to live comfortably in this time period it’s essential that one has a job. They are taking this

The sheer amount of debt that a college student acquires after they finish their schooling is an egregious sum. The average amount that a borrower owes after they graduate is $26,000 (Denhart). These now excessive amounts of debt are thrust upon graduates, both young and old, and could take several years to pay off. Additionally, the national student debt has increased from $80 billion to $500 billion from 1995 to 2011 ("Student debt"). A young adult, fresh out of school, potentially has few approaches to attempt to decrease a debt of such enormity with perhaps a limited income. While less than 1% of people have loans