Is the American Dream: to live in debt for the rest of your life? Apparently.
Total student loan debt in the United States has tripled over the past decade to a whopping $1.232 trillion. Student debt now accounts for a larger share of household debt than credit card, auto loan, and all other forms of debt, except for mortgages, according to the Federal Reserve Bank of New York.
The amount of student loan debt that was 90 or more days delinquent totaled more than $29.4 billion as of the end of 2015, which accounted for almost a third of all household debt that was 90 or more days delinquent. See: Student loan debt debt has tripled to $1.23 trillion–yes trillion.
And this is not just a problem for America. An over-priced education industry and debt sales firms are preying on the naive and financially illiterate and digging the world’s would-be-future economic engines deep into an increasingly insurmountable hole. This is why there has to be a fiduciary responsible exacted on all those who are giving financial advice. The advisors cannot be the same people who are being compensated for getting people into financial risk and debt. The wreckage from debt-driven sales models are evident all around us. See: The college debt crisis is even worse than you think:
“I was 17 when I entered this process,” a student says. “I didn’t understand anything about large amounts of money…She is now a 27-year-old trying to reckon with the fallout from those early decisions. To prepare for the future, she recently attended a class for prospective home buyers and was stunned at how comparatively transparent the process was. “You should have to be preapproved before taking on college debt. You’re buying an education, after all. For the debt I have, I could have almost bought a house in Florida.”
“…whether they are actively recruiting these low-income students for reasons of open-the-door altruism or keep-the-lights-on capitalism — or, more likely, some combination of the two — there has been a huge, largely hidden byproduct of this dramatic increase in access: These students are often being loaded up with staggering debt that is completely out of whack with the earnings boost they’ll likely get from a degree at a nonselective or less selective college. Already, average student loan debt is higher in Boston than any other metro area in the country, 44 percent above the national average, according to Credit Karma. But more troubling, many of these low-income students — and, at some colleges, most of them — are not graduating. That means these non-completers are leaving campus saddled with lots of debt but none of the salary gains that traditionally come with a bachelor’s degree.”
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