1. Student Loan Default Rates

    Posted by Michael • July 21, 2010 @ 8:40 am
    1 Comment

    Those of you with an interest in default rates — student loan default rates, in particular — will want to set aside a few minutes to read the following:

    Chronicle Of Higher Ed: Student-Loan Default Rates: Understated

    Of course findings such as the following will come as a complete and utter shock to everyone (not!):

    According to unpublished data obtained by The Chronicle, one in every five government loans that entered repayment in 1995 has gone into default. The default rate is higher for loans made to students from two-year colleges, and higher still, reaching 40 percent, for those who attended for-profit institutions.

    One in every five loans that entered repayment in 1995 are in default? Yikes. That is nasty. As in, subprime nasty. This is worth mentioning because, according to the fine folks at S&P in July, 2009 …

    S&P now projects defaults on subprime loans issued in 2005, 2006 and 2007 at 11 percent, 30 percent and 49 percent, respectively.

    So the folks issuing student loans to pretty much anybody with a pulse still have some work to do to reach those vaunted levels we associate with subprime default rates. Keep at it, guys! You’re making progress!

    Back to the Chronicle piece:

    But it’s the high rates of default at for-profit institutions that are likely to get the most attention from members of Congress, who have recently raised concerns about the cost and quality of for-profit higher education. Fifteen years into repayment, two out of every five loans made to students who attended two-year for-profit colleges are in default.

    Boy — this would be really troubling to hear if we didn’t recognize that student loans are undoubtedly “good debt” meant only to help you reach your dreams!

    Filed In: Statistics, Student Loans

    Permalink: Student Loan Default Rates

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  2. $100k Workers: Paycheck to Paycheck

    Posted by Michael • July 16, 2010 @ 8:20 am
    6 Comments

    Well, for a minute there, I was almost felt a tinge of sympathy.

    Almost.

    CNBC: More Upper Incomers Living Paycheck to Paycheck

    The centerpiece finding of the above article, I’d say, is this juicy tidbit:

    Thirty percent of workers with salaries of $100,000 or more said they are living paycheck to paycheck, up from 21 percent last year, according to the survey of 4,400 workers nationwide.

    Overall, 61 percent said they always or usually live paycheck to paycheck, up from 49 percent in 2008 and 43 percent in 2007.

    I mean, those $100k salaries don’t go as far as they used to. Thankfully, we can be sure that the reason these folks are feeling stretched money-thin is that they’re cramming as much cash as they can into retirement savings, which can leave them FEELING as if they’re living paycheck-to-paycheck.

    Thirty-six percent said they don’t contribute anything to retirement savings, like a 401(k) or a IRA.

    As for short-term savings, 33 percent of those surveyed reported that they don’t put any money aside each month, up from 25 percent in 2008.

    Okay. Forget I said that.

    We’re screwed.

    Filed In: Saving, Spending, Statistics

    Permalink: $100k Workers: Paycheck to Paycheck

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  3. More Savings Data

    Posted by Michael • May 26, 2010 @ 8:10 am
    14 Comments

    In a bit of survey data that goes hand-in-hand with my “Who Is Saving?” post from a few weeks ago, the Employee Benefit Research Institute earlier this year released its 2010 version of the Retirement Confidence Survey:

    EBRI: 2010 Retirement Confidence Survey

    Among its more-distressing findings:

    • 27% of workers report having $1,000 or less in savings
    • 54% of workers report a total household value of savings and investments (excl. primary home and any defined-benefit plans) to be less than $25,000

    There’s a nice summary of the survey findings in the March 2010 EBRI Issue Brief (pdf).

    Filed In: Saving, Statistics

    Permalink: More Savings Data

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  4. New Study: Who Is Saving?

    Posted by Michael • May 14, 2010 @ 1:10 pm
    4 Comments

    I’m not sure why, but I really love it when I discover new studies on savings and debt.

    (Pretty sick, I know.)

    Somehow I missed this one — entitled “Who Is Saving?” — which showed up on the Consumer Federation of America’s website back in February:

    CFA: Who Is Saving? (pdf)

    Using data from the 2007 Survey of Consumer Finances, Catherine Montalto gives us a glimpse into who’s saving, and how much they’re putting aside for emergencies.

    I find it interesting (okay, more like terrifying, though certainly NOT shocking) that for families in my income range ($59,600-$98,199), only 32 percent actually save for emergencies. And of the ones who DO have savings or money-market accounts, the median value is only $5,000.

    It’s even worse for families in my age group: Of those who have savings accounts, the median balance is just $3,900.

    Yeesh. I gotta tell ya: Reading this makes me feel pretty good about my $15k of liquid savings that we recently completed.

    Be sure to check out the PDF above, and see where you stack up!

    Filed In: Saving, Statistics

    Permalink: New Study: Who Is Saving?

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