There are some interesting, but misleading charts on the student debt problem in Experian’s report: Student Loan Debt Climbs to $1.4 Trillion in 2019.
By misleading, I do not mean purposely so, nor do I mean inaccurate. I simply mean that on the surface one is likely to draw the wrong conclusions.
Please reflect on the above chart. I added the highlight in yellow and the comment.
While pondering, here are some additional charts.
Consumer Debt Balances by Credit Product
Student loans represent the second-largest credit debt for Americans, trailing only mortgage loans. Nationwide, there are more than 148 million outstanding student loan accounts.
There is nothing misleading about the highlight. I simply thought it was noteworthy.
Dubious Congratulations to North Carolina
What’s Misleading?
I hope you gave this some thought.
14.4% of the population with student debt does not seem overwhelming.
But those under the age of 18 don’t have much or any student debt. Those over the age of 40 don’t have much or any student debt.
Concentration
- Student debt is concentrated in age groups that have few assets.
- Student debt is concentrated in age groups also struggling with credit card debt.
- Finally, and most importantly, student debt mostly impacts those in age groups who may want to buy a home, get married, or start a family.
Housing Starts
On Tuesday I commented: Housing Starts Down Slightly: Single-Family Very Weak, Down 12.5% Year-Over-Year
Mortgage News Daily managed to spin the report as positive. It was really pathetic as the the above chart shows.
Single-family starts are well below where they were in 1959. And that is without accounting for rising population.
Piss Poor Monetary Policy
Fed policy bailed out the banks by creating another asset bubble.
That bubble is to the benefit of the banks, the already wealthy, the asset holders, and the baby boomers, in that order.
Millennials, the Screwed Generation
I commented on the prospects in Millennials, the Screwed Generation, Blame Boomers For Making Their Lives Worse
Clearly Fed policy is directed at keeping assets prices high and boomers spending.
There are just two problems. The approach is amoral. There ought not be a Fed in the first place.
Piss Poor Fiscal Policy
On Tuesday, Trump Lashed Out at ECB president Mario Draghi in a Tweetstorm.
Mario Draghi just announced more stimulus could come, which immediately dropped the Euro against the Dollar, making it unfairly easier for them to compete against the USA. They have been getting away with this for years, along with China and others.
— Donald J. Trump (@realDonaldTrump) June 18, 2019
Strange Bedfellows
Curiously, Elizabeth Warren in Bed With Trump: Both Want to Sink the Dollar.
Trump sided with progressive illiterates who believe a weak dollar is good.
Please explain that to struggling millennials stuck in student loans but otherwise wanting to get married, buy a home, and start a family.
Deflationary Outcome
The outcome of piss poor monetary policy coupled with inept fiscal policy is easy to see: A massive debt deflationary collapse in asset prices looms.
Meanwhile Economic Stupidity is Still Well Anchored as illiterates at the Fed debate the entirely useless Phillips Curve.
Bubbles B. Goode
Let’s wrap things up with my video tribute to this mess: Bubbles B. Goode
Mike “Mish” Shedlock
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I was lucky to get by without a student loan back in the day but I had many other problems at university. The biggest ones were related to completing homework and other tasks on time. I studied at the time when a student couldn’t ask for an assignment writing help. Nowadays everything got easier (for the best I guess).
Almost all of my friends have a student duty. I also understand when students spend small amounts on link to newyorkessays.com or educational resources, but I see absolutely no reason to aggravate their financial situation by private schools, which students don’t care about. I always held the opinion that essays on literature should be written primarily by those who really like it.
Not very bright to spend incredible amounts of money for private schools to obtain a degree / job that does not quickly amortize that debt. Unless you are independently wealthy you need to be going to a community college / State school and taking curriculum that are in DEMAND.
Once again, you divert the blame from CONgress, who under Clinton eliminated the ability to expunge student loan debt through bankruptcy. Politicians (and Universities) knew that vulnerable students were the next mark, and they made sure their bankster donors had minimal risk, as these youth were turned into debt slaves – and people wonder why youth suicides are up?!?
I don’t see how the federal reserve is in any way responsible for student debt. I think its because of the unlimited access to student loans which increases demand for college education. As demand increases prices increase just because they can. Same dynamics in the housing crisis easy money leads to price increases. Colleges also are responsible as all the extra money coming in doesn’t get allocated to education but to administrative areas as well as new pretty buildings. They make no effort to keep tuition down. Students are also basically stupid. Instead of going to a community college for two years and going to a local university they can commute to they instead go to a university away to get a “living experience”. I have witness this idiocy on numerous occasions. One friend who can’t afford it allows his daughter to live in an apartment off campus while her commute from his home would be 15 minutes. WTF??? Another person I know let his daughter go away to a university instead of going for free to a local university via a scholarship. I couldn’t help myself so I asked why he allowed this. His response: he didn’t want to her to be upset with him?? I would have loved to tell him to grow some balls but I kept my mouth shut. Also, universities are lengthening the years needed for a degree so many can’t graduate in 4 years and also offering worthless degrees that are unmarketable. It is high time for a tech disruption of this corrupt cabal. Creative destruction of the education monopoly is over due,
Everything you said is spot on. My son is going to community college and will transfer to a 4 year state school in 2020. I convinced him to get his AA degree before transferring, in case something happens, he’ll have something to put on his resume. It’s impossible to get his AA degree in 2 years due to prerequisites for many of his classes. He and all his friends will need 3 years even with taking classes over the summer. As far as transferring to a 4 year school. I gave him an offer. He could live on campus or if he chose to live at home and do the 30 minute commute, I would buy him a new car for $20-$25k. It will cost me the same. He chose the car. He’s not stupid.
Now I have to convince by 2 daughters to do the same, but they’ve been brainwashed into thinking the college you go to is the most important thing in the world. When in reality, what you study is far more important than where you study.
As far as sky high college costs go. i don’t blame the FED. I blame Sallie Mae. When the gov’t decides everyone has a right to borrow as much as they want for education, schools can charge whatever they want. It’s a repeat of the housing crises which I think was caused by Freddie Mac and Fannie Mae for the same reasons.
There’s also the problem of accreditation. There are hundreds of online courses for learning computer programming languages, software systems, various certifications for licensing, etc. Not to mention the gigabytes of open source code that can be studied. But none of that counts at all on a resume’ if it’s not from an “accredited” institution. Back before automatic resume’ rejection an HR manager might have taken some of this coursework into account when sifting through the pile. But with automation and keyword searching those courses probably don’t count for much until after you get in a job.
“Neither a borrower nor a lender be” from Shakespeare’s Hamlet.
Those who did not learn this in high school do not belong in college. Granted, the average education major is not qualified to teach school.