Tag: Student debt

The net worth of college graduates with student debt is truly depressing

The net worth of college graduates with student debt is truly depressing

Though it’s likely that these young adults with college degrees will ultimately pay off their student loan burden, the report captures a moment in time when servicing student debt may pose an obstacle to this group’s other financial goals, like saving for retirement or a home.
“But these short term gains are barely making a dent on young people’s long term plans.” It’s hard to say exactly why the median net worth of young adults with college degrees dropped during this period, but Allison speculates that one reason may be that in 2016, student debt accounted for a larger share of overall debt for these young people than it did in 2013.
About 70% of bachelor’s degree recipients graduate with student loans.
The financial experience of today’s young adults is fundamentally different from what their parents went through.
What’s more, college is more necessary than ever to succeed in today’s economy.
The debt is part of what makes her skittish about buying a home one day, Williamson said.
Williamson said there are certain fields she knows she can’t enter because they don’t pay enough for her to cover her student debt and pay her other bills.
While young people trying to get their financial footing, like Williamson, feel these economic trends acutely, they’ll likely pose a challenge to the economy overall, Allison said.
What’s more, the high cost of education means that parents and grandparents are increasingly taking on student loans to help their kids pay for school.
“It’s not just a young adult problem,” he said.

The best US cities for millennials who have student debt

The best US cities for millennials who have student debt

But according to a new analysis from financial consultancy RewardExpert, these cities might not be the best places for young people with student loans, since living costs are relatively high.
Housing and transportation costs (as compared to the median income for the area) are also lower than 95% of all cities and metro areas in the analysis.
Mankato’s unemployment rate of 2.4% is among the lowest in the nation, and the region’s young residents have considerably low debt loads and high credit scores.
Those under 23 years old have just $8,875 in average total debt with $1,340 on cards ($13,812 and $1,401 nationally).
And while the median rent here is $1,163, renters have a relatively high median income of $48,981.
Combined housing and transportation costs amount to only 58.6% of annual income, which is much lower than the national average of 75.4%.
Commutes in this metro region average just 13 miles, and unemployment stands at a low 2.85%.
About a third of jobs are in industries that typically require a college education.
Plus, median student debt here is $1,072 lower than the national average, and younger residents have lower than average total debt burdens and lower credit card balances than those living elsewhere in the US.
Millennials living here also have 33% less credit card debt than the Midwest’s average.

You may soon be able to declare bankruptcy on your student loans—here’s how
Social Security Disability

You may soon be able to declare bankruptcy on your student loans—here’s how

In February, the Department of Education announced that it will review and potentially alter policies that make it difficult for student debt to be discharged in bankruptcy.
Miranda Marquit, personal finance expert at Student Loan Hero tells CNBC Make It that there are three steps for discharging student debt in bankruptcy: Borrowers must find a lawyer, decide what type of bankruptcy proceeding to pursue and prove that they face “undue hardship.” “The problem was undue hardship was never defined, and the case law has never led to a standardized definition.” “Basically, you have to show that you can’t maintain a basic standard of living while paying the student loans and that this difficulty would last throughout a large chunk of your repayment period,” explains Marguit.
Now, the Department of Education is exploring how to explicitly define undue hardship.
Democrats have previously advocated for a clearer and broader definition, suggesting that specific criteria such as eligibility to receive social security or having a military service-related disability be used in order to determine if a borrower is truly unable to pay their loans.
Making it easier for students to discharge student debt could streamline the bankruptcy process and would help borrowers in serious trouble begin to rebuild their lives. “It absolutely could hold back growth,” said Powell, as reported by Market Watch.
It hurts their credit rating. “Alone among all kinds of debt, we don’t allow student loan debt to be discharged in bankruptcy,” he said.

The Shocking Reason Why 173,000 People Had Their Social Security Checks Reduced in 2015
Social Security Disability

The Shocking Reason Why 173,000 People Had Their Social Security Checks Reduced in 2015

The surprising reason Social Security checks are being reduced But for some 173,000 Social Security recipients in 2015, some of whom are retired workers while others are receiving Social Security disability payments, that income lifeline is being chipped away.
Look no further than student loan debt.
According to a recently released 83-page report from the Government Accountability Office (GAO), the federal government reduced monthly Social Security checks to 173,000 beneficiaries in 2015 who had defaulted on their student loan debt and were still paying it down.
Since 2005, the number of borrowers between the ages of 25 to 49 holding student loan debt grew by 62%.
Social Security garnishments aren’t the answer According to the GAO report, about 43% of older borrowers (defined as persons 50 and up) have had their student loan debt for at least 20 years, a majority owed less than $10,000, and many were paying the maximum allowable offset of 15% of their monthly Social Security payment.
The report states that more than a third of older Americans were still in debt after two years of having their benefits garnished.
An increase in the number of older Americans with student loan debt is partly to blame, but there’s another major problem.
In 1998, the federal government set the threshold for Social Security income offsets at $750 in benefits per month.
It only guarantees Social Security recipients $9,000 in annual income, while allowing the government to continue to take monthly income from sub-poverty level retirees and disabled persons who’ve defaulted on student loan debt.
To begin with, GAO suggests that the federal government update its 18-year-old offset thresholds, which are clearly hurting tens of thousands of beneficiaries who are near or below the poverty line.

7 legit ways to get your student loans canceled
Social Security Disability

7 legit ways to get your student loans canceled

For most borrowers, federal student loans don’t go away until you pay them off.
Whether you’re interested in bankruptcy discharge or disability discharge of federal student loans, here’s how you can qualify.
7 options for federal student loan discharge If you meet any of these conditions, the government will cancel the remainder of your federal student loans.
Even though you won’t have to pay back your student loans, you might have to pay taxes on the discharged balance.
Closed school discharge Federal student loans are for students at accredited colleges and universities.
Nelnet will provide you with the information you need for your application and it will tell your loan servicers to pause collection for 120 days while it makes a determination on your case.
If it approves your application, you won’t have to pay the loans back.
Student loan discharge due to death Federal student loans are also discharged if the borrower dies.
All federal student loans are discharged.
Student Loan Hero combines easy-to-use tools with financial education to help the millions of Americans living with student loan debt manage and pay off their loans.