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More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

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Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#111

Post by bigheadpercoli »

tyrw wrote: post #38
bigheadpercoli wrote: post #29

Earlier quoted context omitted.

The uptick isn't. But if 1/5 student loans are more than 30 DPD, that will be a problem.

Honest question: why is 1/5 that much more of a problem than 18.8%?

~18.8% is roughly 20% or every fifth student loan in the country. If 20% of your portfolio can't repay it's debt that's usually a bad portfolio.

In a simplified model : Assume you give 100 dollar to five people with the intent to earn 5 dollar on interest of each (total 25 dollar interest income.) If now one of them can't pay back the 100 dollar you lose the 100 dollar and the five dollar interest income. So instead of 25 dollar income you get (20-100-5 = -85 dollar). To avoid this situation you start calling the guy (collections activities). Effecting your earnings again.

Of course one months in arrears is not immediately the road to immediate doom, but it is an early warning indicator. Especially if you look into trends to understand the behavior of the portfolio.

In this case the early-stage delinquencies have been improving since 2014 and starting 2017 reversed that trend. So if the trend continues this portfolio segment will grow again leading to more losses and collection activities.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#112

Post by shmerl »

1_2__4 wrote: post #108

I hate sounding both old and weird but I cannot shake the feeling that much of the claims of economic health and growth in the US is... if not fake (I’m not totally nuts) but not accurate. My most charitable interpretation if I’m right is that we’re using the wrong metrics (possibly intentionally) that give a distorted view of the economy. But I keep hearing employment is great, productivity is great, stock market is…

They should use the metric of purchasing power, not just an abstract "growth". If anything purchasing power seems to be dropping for a lot of people.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#113

Post by Avshalom »

shmerl wrote: post #110

With constantly rising real estate prices, this is hardly surprising. Rent is crazy. Time to switch to free high education system.

Are there any recent studies that crunch the numbers on how much that would cost? Because as a debt free college grad earning ~16000 pre tax I'm still willing to commit a fair amount, call it 500 a year? but I have no idea if that's even close to enough if we assume it's progressive at the same rate as income tax.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#114

Post by shmerl »

Avshalom wrote: post #113
shmerl wrote: post #110

With constantly rising real estate prices, this is hardly surprising. Rent is crazy. Time to switch to free high education system.

Are there any recent studies that crunch the numbers on how much that would cost? Because as a debt free college grad earning ~16000 pre tax I'm still willing to commit a fair amount, call it 500 a year? but I have no idea if that's even close to enough if we assume it's progressive at the same rate as income tax.

I'd be interested in that too. There are countries which implement it effectively.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#115

Post by dnautics »

Avshalom wrote: post #113
shmerl wrote: post #110

With constantly rising real estate prices, this is hardly surprising. Rent is crazy. Time to switch to free high education system.

Are there any recent studies that crunch the numbers on how much that would cost? Because as a debt free college grad earning ~16000 pre tax I'm still willing to commit a fair amount, call it 500 a year? but I have no idea if that's even close to enough if we assume it's progressive at the same rate as income tax.

it may cost more than just dollars and cents. I worry that the adage of "you get what you pay for" may start to apply.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#116

Post by Florin_Andrei »

1_2__4 wrote: post #108

I hate sounding both old and weird but I cannot shake the feeling that much of the claims of economic health and growth in the US is... if not fake (I’m not totally nuts) but not accurate. My most charitable interpretation if I’m right is that we’re using the wrong metrics (possibly intentionally) that give a distorted view of the economy. But I keep hearing employment is great, productivity is great, stock market is…

Maybe what that means is that the economy (or perhaps society in general) is/are changing in ways that are genuinely new, and our understanding of it is lagging behind.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#117

Post by rconti »

kozikow wrote: post #109
1_2__4 wrote: post #108

I hate sounding both old and weird but I cannot shake the feeling that much of the claims of economic health and growth in the US is... if not fake (I’m not totally nuts) but not accurate. My most charitable interpretation if I’m right is that we’re using the wrong metrics (possibly intentionally) that give a distorted view of the economy. But I keep hearing employment is great, productivity is great, stock market is…

The top captures all the economic growth: http://time.com/money/4371332/income-inequality-recession/ .

This doesn't give me a great feeling for whether they're recapturing losses from the downturn (from which the rich 'suffered' disproportionately due to their heavy involvement in asset markets), or whether that 85% of the gains is in proportion to what they already took home in proportion of total dollars.

It could be they're taking home 95% of the income so capturing 85% of the growth is actually relatively low. I just don't know.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#118

Post by andrewmcwatters »

1_2__4 wrote: post #108

I hate sounding both old and weird but I cannot shake the feeling that much of the claims of economic health and growth in the US is... if not fake (I’m not totally nuts) but not accurate. My most charitable interpretation if I’m right is that we’re using the wrong metrics (possibly intentionally) that give a distorted view of the economy. But I keep hearing employment is great, productivity is great, stock market is…

All of the above might be great, but that doesn't mean the day-to-day or debt obligations of fellow Americans have improved.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#119

Post by Jach »

didip wrote: post #92

I will forever wonder why Americans don’t go to Europe to study higher education. I heard its much cheaper, if not free, there.

Is it really cheaper or free for non-Europeans? (http://exchangestudentworld.com/student/costs/) Can it be easily done without going through an exchange service? Anyway, some other possible factors for why more Americans don't do it: not many European schools actually wanting them for various reasons (such as academic performance (or as sibling notes there may be an entrance exam), they're full enough with the locals, or would rather have non-American foreign exchange students), most Americans don't know a foreign language very well (and those that do are most likely to know only Spanish), most Americans stay in the same state of their birth, and lots of college students like being able to visit friends and family from their original location and that's a lot more difficult with an ocean in the way -- flights are expensive.

Re: More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why

#120

Post by [deleted] »

13of40 wrote: post #59
frgtpsswrdlame wrote: post #23

Earlier quoted context omitted.

Or we could make public college free, just like we did with high school.

Maybe the real problem is that we've developed this caste system over the last 50 years where people who don't get college degrees are excluded from careers that can sustain a middle class lifestyle. What if free college just moves the goal post and in a couple more decades nearly everyone has a Master's degree and you need a PhD to earn a decent living? What happens if the most talented segment of our work force end…

[deleted]
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