Posted on

Average Student Loan Debt: $28K

The College Board has released its annual reports on tuition costs and financial aid.

The punch line: students who graduated in 2013 with student loan debt had an average total of $28,400.

For most of them, this is bad. Many degrees are worthless even in a better economy and a better job market than we have right now.

The few who graduated with degrees in skilled fields like computer science and engineering will probably be fine. Other degrees, probably not. Note that this isn’t just the obvious silly majors like Etruscan Pottery or Shemale Lacrosse, but some generic business degrees as will.

College isn’t what it used to be, but most people are slow to catch on to that.

Posted on

Half of Americans Can’t Afford their Current House

From Marketwatch:

Over half of Americans (52%) have had to make at least one major sacrifice in order to cover their rent or mortgage over the last three years, according to the “How Housing Matters Survey,” which was commissioned by the nonprofit John D. and Catherine T. MacArthur Foundation and carried out by Hart Research Associates. These sacrifices include getting a second job, deferring saving for retirement, cutting back on health care, running up credit card debt, or even moving to a less safe neighborhood or one with worse schools.

This is a function of 2 things: first, the recession we’ve been in since 2009. More and more people are leaving the workforce or taking low-paying jobs. Regardless of what government statistics say, make no mistake: we are in a recession.

Second, these people didn’t save enough during the boom years to get themselves through the lean years. I get that there will be isolated incidents of extended hardship, but why in the world would half the country have to make a major sacrifice to cover their housing costs? The only answer is a failure to save.

 

Posted on

35% of Americans Face Debt Collectors

From AP:

The study found that 35.1 percent of people with credit records had been reported to collections for debt that averaged $5,178, based on September 2013 records. The study points to a disturbing trend: The share of Americans in collections has remained relatively constant, even as the country as a whole has whittled down the size of its credit card debt since the official end of the Great Recession in the middle of 2009.

This study is a few months old, but I’m posting it to remind you of something very important in credit repair: You are not alone! Over a third of the people you see walking down the street are currently facing debt collectors.

When you’re struggling with debt and being hounded by debt collectors, it’s easy to make up that it is a unique problem you alone are facing; but it’s not. Take a little bit of encouragement from the fact that others are struggling too, and don’t believe everyone who tells you his life is perfect.

Posted on

Subprime Auto Loans at 8-Year High

From Equifax:

The total number of new loans originated year-to-date through June for subprime borrowers, defined as consumers with Equifax Risk Scores of 640 or lower, is 3.9 million, representing 31.2% of all auto loans originated this year.

In other words, nearly a third of all car loans made this year have been to people with credit scores below 640.

This is great news if you’re looking to buy a car. For those of you who are rebuilding your credit and have developed the self-discipline necessary to handle a loan, there’s never been a better time to apply. Rates are low, and people are getting approved right and left. I recommend going with a credit union for the best rates.

And as always, if you’re not able to comfortably make the payments with your current income, don’t take out a loan. Better to sit this one out than to take out a loan you can’t afford just to try to improve your credit.

The credit ladder will still be there tomorrow. Make good choices.