Posted on 07/08/2013 5:04:31 AM PDT by SeekAndFind
At this point readers are well aware of the numbers behind student loan debt. As the cost of a college degree has risen, total debt has soared; $1 trillion the latest number.
$1 trillion has predictably led to a lot of hand wringing, but as University of Georgia economics professor Jeffrey Dorfman has soberly noted, the median student loan debt balance is a mere $13,000. In short, for most graduating college students the manageable number is worth the door-opening credential that is a college degree.
As for those individuals with debt that well exceeds $13,000, Dorfman points out that many are students in pursuit of graduate degrees. Each situation is unique, but often students are willing to take on extra graduate school debt precisely because the higher-level credential will bring with it access to jobs with earnings that make loan balances fairly easy to pay down over time.
So while the student-loan story is far less perilous than most in the media would have us believe, there’s some bad news out there that’s perhaps not been commented on enough. Amid all the wailing about college loans and interest rates on those loans potentially doubling, comes the news that some federal employees will be shielded from any increase altogether.
As USA Today put it in a recent report, some federal workers and congressional staff will be protected from higher interest rates on student debt given the desire among federal lawmakers “to make government jobs more appealing to job candidates who would earn more in the private sector.” There’s so much wrong with the latter that it’s hard to know where to begin. Suffice it to say, efforts to make government work more desirable do major damage to basic economics.
(Excerpt) Read more at forbes.com ...
A disingenuous report at best. There can be a big, big difference between a “median” debt, and an “average” debt.
In my recalling of recent debt numbers $13,000 is highly misleading.
Additionally, the author, without basis or fact citation, writes off a lot of the unmentioned “higher debt” to grad students pursuing a higher degree.
In all not a very rigorous or well-documented assertion in my book (for his opening thesis, anyway).
Last week Rush reported that the Administration actually wants the rates to stay high. They need the money for Obamacare, and believe that Generation Text will continue to reflexively blame the GOP anyhow.
That being the case, the GOP should propose a bill to pull back the interest to where it was and dare the Dems to vote against it. Will be great fun, and will have the beneficial side effect of helping to defund Obamacare.
Well, I can attest that I had paid off my undergrad student loans in the 1990s. Max balance was ~5K. I also took out new loans for grad school in 2006. Max was about 9K. I expect to pay it off completely in ~3 more years.
But then, I ALSO made sure I was getting a marketable degree, and shopped around for affordable tuition. There are idiots out there who MUST have an underwater basket-weaving degree from an Ivy League school. And they are getting what they deserve. On the other hand, they make GREAT Subway sandwiches and lattes at Starbucks. . .
Ok, you fit the median. How about some of the figures you see in the OWS placards that were in the news a year or two ago? In the $50K plus region easily.
What the author should have posted is a graphic that shows the data he examined (and asserts therefrom the median is close to ‘average’) is the shape of his data distribution.
For a reader to take ‘average’ from median, the curve would likely have to be bell shaped (Gaussian).
I think of THAT as Evolution in Action (evil grin)
A more onerous problem is those who took on student loans and did not graduate.
There are student loans and the failed cosmetology or barbering or truck driving students that attended schools designed to suck up loans rather than educate.
When anyone states that a “given” figure for the MEDIAN student debt, that figure includes student loans by the thousands that are 4 or 5 payments from payoff.
I think the looming disaster faces the NEWER debtors, those who took huge loans to finance ever RISING out of control college tuitions. Also seduced into field of study that NEVER had employment opportunities available on graduation.
No jobs, no chances, no income, no hope...a perfect combination of ingredients for a social explosion.
It is not going to be pretty.
Agreed. 13K sounds way off.
“Each situation is unique”
I hate that phrase. Millions of students with loans seems to indicate there isn’t that much uniqueness. That phrase is just filler.
Agreed. There is a massive simmering problem in those who went to college because they were told this is the only way to get a job, waste two years and $20,000 to go and end up in a low skill job they could have gotten with a high school degree. Now their earnings are sapped by paying off debt to over-paid college professors with tenure.
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