The biggest news this week is all about student loan affordability, as the Consumer Financial Protection Bureau released a new study on the topic.
CFPB Releases New Report on Student Loan Affordability
The CFPB decided to examine the issue of student loan affordability in February 2013, issuing a request for comment in the Federal Register. After 28,000 comments flooded in from borrowers, lenders and other concerned parties, the agency released a summary report Wednesday.
The report outlines a ripple effect that branches out to the housing market, small businesses and retirement savings. Specifically, young Americans are forgoing homebuying, starting a small business and saving for retirement due to the fact that student loan payments are taking up too much of their income.
The impact of massive student loan debt is especially affecting rural areas, where lower income means those with student loan debt can’t afford to live in these areas. There’s a brain drain occurring in these areas that could have a larger negative impact in the future.
Student Loan Debt: How Much Is Too Much?
Our Co-Founder and Chairman Adam Levin recently commissioned a poll on how Americans view student loan debt. Specifically, he wanted to understand where we draw the line — how much student loan debt is too much. What he found was interesting.
One in five senior citizens and almost a quarter of adults between the ages of 35 to 49 agree that $20,000 to $50,000 in student loan debt is too much to borrow. Considering that just one year of college at a top university can already top the high end of that barrier, it’s no surprise that younger survey respondents disagreed. Only 16 percent of respondents between 18 and 24 said graduating with that much debt is too much.
How I Turned My Financial Life Around in a Year
Our Director of Consumer Education, Gerri Detweiler, recently attended the Women’s Money Conference in Las Vegas. At this conference, she met up with a woman she spoke with at last year’s conference who had made a major money turn-around.
Linda, whose struggles with gambling addiction had put her tens of thousands of dollars in the hole, has used the support system of her boyfriend and her friends to help her eliminate her debt and start building her savings. Read her full story in the piece.
Image: NS Newsflash, via Flickr