Gallup : Americans’ Big Debt Burden Growing, Not Evenly Distributed

Gallup : Americans’ Big Debt Burden Growing, Not Evenly Distributed

Estimates of Americans’ debt burden abound, and unfortunately, they’re almost all different. But one thing is clear: Americans are carrying a lot of debt, especially millennials, according to Gallup analysis. Perhaps the most surprising finding from Gallup’s analysis is just how few Americans account for that mountain of consumer debt. For example, three out of four U.S. adults (76%) report that they have at least one credit card, but, on average, Americans have 3.4 of them. The percentage of Americans who have credit cards is lowest among millennials (65%) and highest among traditionalists (85%), with Gen Xers (78%) and baby boomers (83%) in between. Though 76% of U.S. adults report having at least one credit card, just under half of Americans (48%) carry credit card debt, with fewer traditionalists (32%) and more Gen Xers (61%) carrying credit card debt. The Generation X finding isn’t surprising, given that they are in their prime child-rearing years and that they have more cards than any other group (4.5). About two in 10 Americans (19%) report having student loan debt, with 35% of millennials and 25% of Gen Xers saying they do. Gen Xers hold the largest average student loan balances with over $30,000 outstanding. Student Loan Debt Situation Dire for Many Millennials and Gen Xers There has been extensive media coverage of the student loan debt crisis, and Gallup analysis suggests that the situation is indeed dire for the one-third of millennials (35%) and one-quarter of Gen Xers who carry student loan debt. But the ‘crisis’ does not appear to extend very deeply into any generation. Some have argued that carrying student...
Is Today’s Student Loan Crisis Tomorrow’s Retirement Crisis?

Is Today’s Student Loan Crisis Tomorrow’s Retirement Crisis?

For all the jokes about baby boomers having to eat dog food in retirement, it’s beginning to look like millennials will be lucky to afford even the store brand. The problem is their student debt. Experts have worried for some time about the impact millennials’ historically high levels of debt (currently averaging $31,000 at graduation) could have on their retirement savings. Now, in a paper released this week, the Center for Retirement Research at Boston College has attempted to quantify the problem. And the result isn’t pretty.  A majority of grads could be headed for trouble, this new study finds. The center calculates what it calls the National Retirement Risk Index (NRRI), an estimate of how many households won’t be able to maintain their standard of living after they retire. The index has been rising steadily since the early 1980s, starting at 31% in 1983 and peaking at 53% in 2010. As of 2013, the most recent year available, it stands at 52%. Six Americans out of every 10 might not be able to support themselves in the style they’re accustomed to when retirement rolls around. That’s alarming enough. But if you factor in student debt, the center says, the percentage would rise to 60.1%. Put another way, six Americans out of every 10 might not be able to support themselves in the style they’re accustomed to when retirement rolls around… Continue Reading at TIME… By: Greg Daugherty...

All of Your Federal Student Loan Repayment Options in One Chart

Six months after you graduate (or otherwise leave college), you’ll typically be placed into a standard 10-year repayment plan with 120 equal monthly payments. If you earn enough to pay off your loans in this period or less, do it—unless you work in public service. (More on that in a minute.) You’ll end up saving thousands of dollars in interest, compared with other federal plans. If you do work in public service, enroll in an income-driven plan, so that you can take advantage of a policy that will forgive any outstanding debt after 10 years. If you’re struggling to pay your bills each month, you also should consider applying for an income-driven plan. There are five types, but the newest one—REPAYE—is the most generous, and available to the greatest number of people, so it’s likely to be your best option. Plus, it has no income-level qualifications, meaning anyone can enroll. To find the right plan for you, start by visiting the National Student Loan Data System to track down the type of loan you currently have, the interest rate you’re paying, and how much you still owe… Continue Reading at TIME… By: Kaitlin...
U.S. Senate Looks for Solution to High Student Loan Debt

U.S. Senate Looks for Solution to High Student Loan Debt

Senators from Wisconsin to Hawaii have started a campaign in Congress to give college affordability the attention they believe it deserves so more young adults can have a shot at a higher education. It’s the question many student face when going off to college. How am I going to pay for this? For students at Drake University in Des Moines, it’s a big concern. “I’m currently working so I can help pay for that,” Drake University Freshman Maddie Sell said. It’s something Hawaii Senator Mazie Hirono understands all too well. “I paid this my own way through undergraduate and graduate school I had debt, it took me 15 years to pay off my law school loans,” Hirono said. She said student debt is raising concern from too many American families, even starting at an early age. “Even in fifth grade they’re worrying about how their parents are going to send them to college,” Hirono said.   That’s why she joined the #inthered campaign and signed on to the “Reducing Educational Debt” Act. In it, she wants to see continued support for Pell grants, which she says half of students who go to college rely upon… Continue Reading at...
Is this robocall illegal? The line blurs for people with student debt

Is this robocall illegal? The line blurs for people with student debt

Companies that collect student loan payments on behalf of the Department of Education are allowed to robocall consumers. When Sam Adler-Bell started receiving calls last summer from numbers he didn’t recognize with area codes in “weird little towns” offering to help him pay off his federal student loans, he was both intrigued and skeptical. He’s a policy associate for the Century Foundation, a nonpartisan research organization focused on education, the economy and other topics, and he remembers thinking it didn’t make sense that a call about federal student debt relief would come from a little town in Minnesota instead of, say, Washington, D.C. And yet, “when I answered it, I was initially convinced,” he said, but not convinced enough to sign up for the offer. After some research, Adler-Bell, 25, later discovered that the call was from a student debt relief company, part of a burgeoning industry of what some consumer advocates and law-enforcement officials have labeled scams that offer to help federal student loan borrowers better manage their debt for a fee by enrolling them in government programs they could otherwise access for free. “I’m a pretty savvy consumer, I think, and I research privacy and surveillance policy for a living,” Bell said in an interview recalling the experience. “That being said, when somebody tells me ‘your federal loans have been flagged for this debt reduction,’ for an instant I think, ‘oh wow that’s great.’” Adler-Bell believes the company was using an automated device to call him — also known as robo-dialing — and continued to pester him about once a week for the next few months. Though...