Archive for the ‘Back to School’ Category

Student Loan Debt Delays Homeownership by 7 Years

Posted on September 22, 2017 by Laura Lam

An overwhelming majority of Millennials with student debt do not own a home, and believe this debt is the cause for the delay.  These are the findings of the 2017 Student Loan Debt and Housing Report from the National Association of Realtors and nonprofit American Student Assistance.  The study revealed the typical delay is about 7 years. But home buying isn’t the only factor affected by student debt. The study showed student debt is holding Millennials back from financial decisions and personal milestones such as saving for retirement, changing careers, continuing their education, marrying and having children. “The tens of thousands of dollars…

2017 Back-to-School Spending to Reach $83.6 Billion

Posted on August 18, 2017 by Laura Lam

With consumer confidence rising and more young people in school, back-to-college spending is expected to hit an all-time high this year while back-to-school spending is expected to see its second-highest spending level on record, according to NRF’s annual survey conducted by Prosper Insights & Analytics. Total combined spending is expected to reach $83.6 billion, an increase of more than 10% over last year’s $75.8 billion. U.S. parents are expected to spend an average of $688 on back-to-school items this year, an increase over 2016 spending of $674. The best deals will be available to parents who shop either very early…

The Top 10 Careers for First-Time Home Buyers

Posted on May 26, 2017 by Laura Lam

Although home prices continue to rise, one degree stands above the rest as being the best for those who wish to buy at home closer to the start of their career.  Of the top 26 degrees that would allow graduates to purchase a home in four years, 22 of them involve engineering, according to a recent study from Realtor.com.  The top degree enables buyers to purchase a home within 2.5 years of graduation. “When it comes to homeownership, degrees in engineering really pay off,” realtor.com Senior Economist Joe Kirchner said. “It shows just how powerful a high starting salary can…

Fannie Mae Changes Affect Borrowers With Student Loans

Posted on May 11, 2017 by Laura Lam

Fannie Mae has recently outlined changes in the way lenders can qualify potential borrowers who have student loan debt.  The policy change is designed to make it easier for more consumers to qualify for mortgages, in part by excluding some non-mortgage debt for income-to-debt calculations.  These debts can be things like installment loans, student loans, and other monthly debts as defined in the company’s mortgage lending guide. According to the Fannie Mae web site, “If the lender obtains documentation that a non-mortgage debt has been satisfactorily paid by another party for the past 12 months, then the debt can be excluded from…

Millennials’ Debt Load Could Weigh Down Economy

Posted on May 09, 2017 by Laura Lam

Millennials — 21 to 34-year-olds — hold an estimated $1.1 trillion of the country’s $3.6 trillion in consumer debt, according to UBS, as rising student and auto loans outweigh a drop in mortgages.  All that rising debt is coming with rising default risks. A UBS evidence lab survey found that 52% of people worried about defaulting on any loan over the next 12 months were in the 21 to 34 age group. That’s not good news considering those same individuals are meant to be the largest source of spending on big-ticket purchase items like houses and cars over the next year.  There is already…

Subprime Student Loans Resemble Pre-Crisis Mortgage Loans

Posted on April 28, 2017 by Laura Lam

Millions of U.S. parents have taken out loans from the government to help their children pay for college … now a crushing bill is coming due.  Hundreds of thousands have tumbled into delinquency and default. In the process, many have delayed retirement, put off health expenses and lost portions of Social Security checks and tax refunds to their lender, the federal government. Student loans made through parents come from an Education Department program called Parent Plus, which has loans outstanding to more than 3 million Americans. These loan applications ask almost nothing about its borrowers’ incomes, existing debts, savings, credit…

Over 40% Students Don’t Make School Loan Payments

Posted on April 26, 2017 by Laura Lam

More than 40% of Americans who borrowed from the government’s main student-loan program aren’t making payments or are behind on more than $200 billion owed, raising worries that millions of them may never repay.  The new figures represent the fallout of a decade-long borrowing boom as record numbers of students enrolled in trade schools, universities and graduate schools. While most have since left school and joined the workforce, 43% of the roughly 22 million Americans with federal student loans weren’t making payments as of Jan. 1, according to a quarterly snapshot of the Education Department’s $1.2 trillion student-loan portfolio. About 1…

Student Loan Debt May Have Adverse Long-Term Impact

Posted on April 17, 2017 by Laura Lam

Rising student loan debt in the United States could ultimately hurt overall home ownership and consumer spending and erode colleges’ and universities’ ability to elevate lower-income students.  New York Fed President William Dudley, an influential monetary policymaker who was citing research from his institution, pointed to rising costs of higher education and student debt burdens as culprits in the troubling trend. Overall U.S. household debt is expected to surpass its pre-recession high later this year. Proportionally, Americans have shifted away from housing-related debt and toward auto and student loan debt, with aggregate student loan balances $1.3 trillion at the end of last year, up…

Student Loan Defaults on the Rise

Posted on March 29, 2017 by Laura Lam

A new analysis of government data by the Consumer Federation of America found that the number of Americans in default on their student loans jumped by nearly 17% last year.  As of the end of 2016, there were 4.2 million Federal Direct Loan borrowers in default, meaning they’ve not made a payment in more than 270 days. That’s up from 3.6 million at the end of 2015. “Despite all improvements in the economy, student loan borrowers are still struggling,” said Rohit Chopra, senior fellow at the Consumer Federation of America (CFA).  As of the end of 2016, 42.4 million Americans…

Student Loan Debt: A $1.3 Trillion Crisis

Posted on March 21, 2017 by Laura Lam

According to the New York Federal Reserve, U.S. student loan debt has soared to $1.3 trillion becoming the second highest consumer debt category, more than both credit cards and auto loans.  Washington College President and former Federal Deposit Insurance Corporation (FDIC) Chair Sheila Bair said the student loan debt crisis could spark next financial crisis, since it is a “tremendous drag” on the U.S. economy. During the financial crisis of 2008–09, excessive mortgage debt collapsed consumer spending as more families opted to pay off debt. Bair said the same dynamic could be seen if the student debt bubble bursts.  “With…