The High Cost of College
25 Sep 2014
It’s hard to succeed in today’s world without an education; no one will argue that. However, the cost of college is ever increasing and unfortunately, more students are graduating with a tremendous amount of debt and the inability to pay it off. The statistics don’t lie:
– According to the Federal Reserve Bank of New York, in 2012, more than 30% of student loan borrowers who moved into their repayment cycles were delinquent (more than 90 days late on payments).
– In 2012, a total of 39 million people owed a total of $966 Billion (yes with a “B”) in student loan debt.
– In 2012, the average balance was $25,000. By contrast, in 2004 it was $15,000.
A weaker job market could play a significant factor in all of this. For example, the average unemployment rate for 20 – 24 year olds in 2012 was 13.3%, versus 9.4% in 2004. Additionally, student loan payments can make up a large portion of a young person’s budget. All of this has made student loan delinquencies rise as compared to other types of debt (as seen in the chart below).
So, if you have young children and are considering setting aside money for college, we believe the sooner you start, the better. What good is a great education if it bankrupts you to get it.
Jeffrey A. Johnston, ChFC
President of Premier Investments of Iowa, Inc.
Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Premier Investments of Iowa, Inc. are not affiliated .