Posts Tagged ‘student debt’

73% of Americans Have Financial Regrets

Posted on June 06, 2017 by Laura Lam

Nearly 3-in-4 U.S. adults have financial regrets, according to a new Bankrate.com report. The most common is not saving for retirement early enough, followed by not saving enough for emergency expenses and taking on too much credit card debt. Taking on too much student loan debt is fourth, however, it tops the list among older millennials (27-36 year-olds). Fifth overall is not saving enough for your children’s education and sixth is buying more house than you could afford. Baby Boomers are the most likely to regret not saving for retirement earlier; remorse over this issue grows steadily from age 18-62. It’s…

Switching Gears: Builders Turn to Starter Homes to Lure Millennials

Posted on May 22, 2017 by Laura Lam

First-time buyers are rushing to buy homes after a decade on the sidelines, promising to kick a housing market already flush with luxury sales into higher gear.  Tracking home sales to a particular age group is hard, but a series of data points form a mosaic of a generation of young people ready to buy: The number of new-owner households was double the number of new-renter households in the first quarter of this year, the share of first-time buyers is creeping back toward the historical average, and mortgages for first-timers are on the rise. “They’re crawling out of their parents’…

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…

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 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…

Are Automakers Creating the Next Financial Crisis?

Posted on March 06, 2017 by Laura Lam

The country’s auto debt hit a record in the fourth quarter of 2016, according to the Federal Reserve Bank of New York, when a rush of year-end car shopping pushed vehicle loans to a dubious peak of $1.16 trillion. The combination of new car smell and new credit woes stretches from Subarus in Maine to Teslas in San Francisco.  It’s an alarming number, big enough to incite talk of a bubble. On average, every licensed driver in the U.S, owes about $6,100 in car payments. But the market for cars is a lot different than that for houses. Vehicles are a more fluid asset…

Lending Trouble Lies Ahead in 2017

Posted on January 04, 2017 by Laura Lam

Mortgages, commercial-and-industrial loans, subprime auto lending and student lending are ripe for setbacks and, in some cases, crises in 2017.  Here is a breakdown of each of those risk factors, the reasons behind them and the possible upsides or alternative strategies. Mortgages – The refinance market has largely carried the mortgage industry over the past few years because consumers took advantage of historically low rates. Now that the Federal Open Market Committee has raised rates twice in the past year, and the benchmark 10-year Treasury has spiked upward since the presidential election, many expect the refinancing market to nosedive.  “We’ll…

Are Millennials Scared of Credit Cards?

Posted on August 16, 2016 by Laura Lam

Data from the Federal Reserve indicates that the percentage of Americans under 35 who hold credit card debt has fallen to its lowest level since 1989, when the Fed began collecting data, according to an analysis by The New York Times.  While older Americans have also been shedding credit card debt since the financial crisis that began in 2008, data from the Survey of Consumer Finances shows that the millennial age group has the most rapid decline in the proportion holding credit card debt.  “It’s pretty clear that young people are not interested in becoming indebted in the way that…

Housing Still Faces Obstacles; Could Be ‘Engine of Growth’

Posted on June 28, 2016 by Laura Lam

The Joint Center for Housing Studies (JCHS) at Harvard University released its 2016 report on The State of the Nation’s Housing. Calling the housing sector “an engine of growth,” the study found that the need to replace old housing and to meet demand for vacation homes and other units, new housing construction should average “at least” 1.6 million units annually for the next decade. New home building faces some headwinds however. Tighter lending rules are one serious issue. Mortgage lenders have made essentially no loans to potential buyers with subprime credit scores (below 620) and have cut back sharply on loans to applicants…