"Debt burden forcing younger workers to delay major purchases" by Annie Lowrey | New York Times, May 11, 2013
NEW YORK — The anemic economy has left millions of younger working Americans struggling to get ahead.
Related:
US wealth gap grew during recovery
Interesting Bank Post
A New Golden Age For Corporate Profits
It hasn't been that anemic for some. And now the jobs you were supposed to get are going to be farmed out to cheap foreign imports (the wizards of Wall Street must have thought it works for products, why not people?).
The added millstone of student loan debt, which recently exceeded $1 trillion in total, is making it even harder for many of them, delaying purchases of things like homes, cars, and other big-ticket items and acting as a drag on growth, economists said.
Especially when the good jobs they were supposed to get are being fobbed off on cheap foreign imports, and the s*** jobs are being fobbed of on.... cheap foreign imports. Hey, don't despair, 'murkn kid; there is ALWAYS the MILITARY!
Yeah, you poor college kids loaded with debt are destroying the American economy. Lord forbid it has anything to do with the usurious private central banking scheme.
The Federal Reserve Bank of New York, in a new study, found that 30-year-olds with student loans are now less likely to have debts like home mortgages than 30-year-olds without student loans — even though most of those with student loans are better educated and can expect to earn more money over their lifetimes. The same pattern holds true for 25-year-olds and car loans.
‘‘It is a new thing, a big social experiment that we’ve accidentally decided to engage in,’’ said Kevin Carey, the director of the Education Policy Program at the New America Foundation, a research group based in Washington. ‘‘Let’s send a whole class of people out into their professional lives with a negative net worth. Not starting at zero, but starting at a minus that is often measured in the tens of thousands of dollars. Those minus signs have psychological impact, I suspect. They might have a dollars-and-cents impact in what you can afford, too.’’
You learn the le$$on yet?
The weak economy and tight credit standards remain the main culprits preventing young people just establishing themselves from making major purchases.
Right, credit is your savior. These a$$holes calling the shots must think you is real stoo-pid, kids -- and maybe you ares.
But millions now face putting a substantial share of their take-home pay toward past debts rather than present needs.
And WHO BENEFITS?
Student loan debt leaves them with less money for things like clothes and restaurant meals. And it is even more likely to suppress purchases of more expensive items that need to be bought with credit.
On the other side of the equation, many college graduates now in their 20s and early 30s should eventually be able to make up for lost ground.
Why?
Students who take on debt to pay for higher education commit themselves to paying off huge sums, but they usually lift their lifetime earnings by substantial amounts.
For most young workers, gaining a college degree remains well worth it in the long run, even if it delays some purchases in the near term. ‘‘For an individual going to college and ending up with a lot of debt — you’re still better off,’’ said Chris G. Christopher of the forecasting firm IHS Global Insight.
So says the paper that $erves banks.
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Maybe the government can help you pay off those loans:
"US seeks more payment flexibility for private student loans" by Danielle Douglas | Washington Post, May 11, 2013
WASHINGTON — The Consumer Financial Protection Bureau this week issued a series of proposals to create more flexible repayment plans for the millions of Americans struggling with private student loans.
Such loans, which are offered by banks and other financial firms, account for $150 billion of the $1 trillion in outstanding student loan debt, but they have come under increased scrutiny. They generally carry higher interest rates and fewer protections than federal loans.
To ease the burden on borrowers, the consumer bureau said that those who pay on time should be able to refinance their debt at lower interest rates.
Except the banks hate that.
Borrowers who fall behind should have access to income-based repayment plans, it said. The CFPB urged lenders to implement those recommendations. In addition, it said policy makers should help those with private loans by replicating for them the rehabilitation program available to those with federal student loans, which helps people exit default and repair their credit.
‘‘Many private student loan borrowers have run out of options and are struggling to make ends meet,’’ CFPB director Richard Cordray said Wednesday at a hearing in Miami.
Where is their bailout?
The CFPB’s proposals are based on input from nearly 30,000 borrowers, policy specialists, and lenders. It follows a report the agency issued to Congress last year noting that lax underwriting standards crept into the private student loan market in the run-up to the financial crisis.
Oh, no, they didn't bundle them, did they?
Just 60 percent of private loans originated in 2006 and 2007 had co-signers, compared with 90 percent in recent years. The effects of those loans weren’t felt until students left school and were confronted with unmanageable debt in a tough employment market, according to the CFPB report.
The lenders that dominate this market, including Citigroup, JPMorgan Chase, Wells Fargo, and Discover Financial Services, are less likely to restructure loans by lowering or delaying the payments, according to the bureau.
And since they are too big to jail no amount of government pressure matters.
But Obama's your friend, kids. You guys must really be stoo-pid to believe such things.
Part of the problem, industry groups say, is that accounting rules would require banks to set aside more capital before making those types of concessions.
What, they wouldn't be able to put enough of those into profits?
‘‘It’s important to recognize that these student loans are very unique assets and the characteristics are very different than other types of loans,’’ said Pace Bradshaw, vice president of congressional affairs at the Consumer Bankers Association, whose members include private student lenders.
Yeah, they can't be wiped out by bankruptcy.
The association recently sent a letter to the three banking regulators asking them to give lenders more leeway to offer forbearance to recent graduates.
So they can not offer it.
Bradshaw pointed out that despite the hardships borrowers face, private student loans have a 5 percent default rate, compared with a 13 percent default rate for federal loans.
Related: Sunday Globe Special: Lip-Smacking Debt Collectors
The banker spokesman lied?
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UPDATE: Obama loan policy rips off students by record $51b
But he's your friend, kids!
