Every now and then we should stop and think about the context of higher education that we mostly hope most of our kids are headed for.... the New York Federal Reserve has come out (November 27, 2012) with a Q3 household financials report, Decrease in Overall Debt Balance Continues Despite Rise in Non-Real Estate Debt - Federal Reserve Bank of New York
These debts, of course, are not discharged in bankruptcy. It's a profoundly immoral system in which our almost-adults are urged to jump into heavy debt with no serious consideration of their long-run finances, and no way out at all. The very useful ZeroHedge finance site emphasizes "The Scariest Graph of the Quarter," being the student-loan line from
A slow multi-year rise to 9%, back to 8.5%, and now a sudden jump to 11% where the new delinquency measure is known to underestimate the real problem quite drastically. So it's worse than that, even though the other loan types are not doing anything of the kind. Looking for something positive to say, we can see this as one source of pressure for online education technology at the college and graduate level; that technology, whether from Coursera or MITx or Western Governors or ...., then becomes available at the KhanAcademy level.
Or then again, maybe not.
in the third quarter, non-real estate household debt jumped 2.3 percent to $2.7 trillion. The increase was due to a boost in student loans ($42 billion), auto loans ($18 billion) and credit card balances ($2 billion). ...The reduction in overall debt is attributed to a decrease in mortgage debt ... and home equity lines of credit...
Outstanding student loan debt now stands at $956 billion, an increase of $42 billion since last quarter. ... $23 billion is new debt ... the percent of student loan balances 90+ days delinquent increased to 11 percent this quarter.2...
2 these delinquency rates for student loans are likely to understate actual delinquency rates because almost half of these loans are currently in deferment, in grace periods or in forbearance and therefore temporarily not in the repayment cycle. This implies that among loans in the repayment cycle delinquency rates are roughly twice as high.
These debts, of course, are not discharged in bankruptcy. It's a profoundly immoral system in which our almost-adults are urged to jump into heavy debt with no serious consideration of their long-run finances, and no way out at all. The very useful ZeroHedge finance site emphasizes "The Scariest Graph of the Quarter," being the student-loan line from
A slow multi-year rise to 9%, back to 8.5%, and now a sudden jump to 11% where the new delinquency measure is known to underestimate the real problem quite drastically. So it's worse than that, even though the other loan types are not doing anything of the kind. Looking for something positive to say, we can see this as one source of pressure for online education technology at the college and graduate level; that technology, whether from Coursera or MITx or Western Governors or ...., then becomes available at the KhanAcademy level.
Or then again, maybe not.
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