Student Loans Are Hurting Millennials’ Net Worth

MoneyTips

Student loan debt in America has topped $1.5 trillion dollars, and millennials hold a large amount of that debt burden. As of 2017, 37.5% of Americans with student loan debt were under the age of thirty.

A new study by MagnifyMoney highlights the difficulties millennials face because of their debt. Since student debt draws money away from other savings and investment opportunities, the long-term effect on net worth can be devastating.

The short-term effect on net worth is striking as well. According to the study, millennial households without student debt have an average net worth of $114,376. Millennial households holding student debt have an average net worth of $29,087 – approximately 75% less than their student-debt-free counterparts.

The discrepancy shows up in all financial aspects.

Millennial households without student loan burdens have almost twice as much in their savings and checking accounts compared to those with student loans ($10…

Asking A College to Reconsider Their Financial Aid Package

MoneyTips

When a college makes an offer of financial aid, parents and students have the right to appeal and discuss the findings with the financial aid officer. In some cases, the institute of higher learning may up their offer.

When possible, try leveraging off of any aid packages offered by a competing institution where you applied. Some amount of aid is kept in reserve to enhance offers for kids schools really want. Contact the financial aid officer indicating that the school is your child’s preferred choice but that other schools offered better packages. Competition never hurts and here it may help you. Provide specifics of the other aid packages. Do this as soon as possible before the reserve funds are exhausted.

Financial aid officers may also exercise “professional judgment” to review and change offers. “Special circumstances” are the basis of exercising such judgment. Special circumstances may include unusual or one-time income in the Base Year used to calculate th…

Scary Financial Facts

MoneyTips

Are you ready for some Halloween horror stories? Forget Freddy Krueger, Jason Voorhees, or Michael Myers – we’ve got something really scary for you. Those three famous horror movie characters can’t compete with these three real-life financial horrors.

The Debt’s Coming from Inside the House! Get Out Now! – America’s national debt has topped a staggering $21.6 trillion – but your main concern is your own household debt. Unfortunately, America’s household finances aren’t in much better shape.

According to the New York Federal Reserve’s Q2 2018 Household Debt and Credit Report, aggregate household debt is $13.29 trillion – the highest collective debt ever. Household debt has been rising for the last sixteen quarters. Outstanding student loans alone have topped $1.5 trillion. Revolving debt – mostly credit card debt – hit $1.03 trillion.

Out-of-control spending can crush your finances. To prevent spending binges,

5 Tips For Saving Money In College

MoneyTips

By Roshni Chowdhry, head of customer experience at SafetyNet

Of the 17 million Americans currently enrolled in college, 74 percent qualify as what we used to call “nontraditional” students:

  • One in five is 30 years or older.
  • About half don’t rely on their parents for money.
  • One quarter are caring for a child.
  • 47 percent attend college part time at some point.
  • 25 percent took a year off between high school and college.
  • 44 percent have parents without a bachelor’s degree.

In other words, if you’re a college student today, there’s a good chance you’re not the Hollywood stereotype of an 18-year-old on your own for the first time. Still, whether it’s your first year of indepe…

Video: Can You Get A Scholarship With A Low GPA?

MoneyTips

Is your GPA all that counts when you apply for college financing? Watch the Scholarship System Founder Jocelyn Paonita Pearson explain how to get a scholarship with a less-than-perfect GPA in our exclusive video above.

Your credit score could affect your student loan interest rate. You can check your credit score and read your credit report for free within minutes by joining MoneyTips.

Advertising Disclosure

Don’t Catch Sexually Transmitted Debt!

MoneyTips

“I picked up a really bad case of debt from my ex, and I can’t get rid of it.”

You can pick up several unpleasant surprises from a sexual partner, but have you considered painful, lasting financial ramifications? According to a recent survey from Finder.com, around 74 million Americans have picked up a “sexually transmitted debt,” a debt that’s assumed as part of a relationship.

The study determined that the average sexually transmitted debt (STD) works out to $11,485, with most acquired through marriage (28%) or in a divorce settlement (14%). In some states, the IRS says debt taken on by either spouse after the wedding is automatically a shared debt. The remaining reasons in the top five all relate to spending. Purchases made in a partner’s name account were cited in 25% of the cases, while joint account purchases were cited in 20% of the cases – and the dreaded secret …

#1 Older Millennial Debt Is Not Student Loans

MoneyTips

According to Federal Reserve data, student loan debt has surpassed $1.5 trillion and comprises 11% of America’s collective household debt balance – second only to mortgage debt. More than 44 million Americans have student loan debt, with an average balance of around $33,000.

Given those statistics, you might expect student loans to be the biggest debt burden for millennials. However, at least part of the millennial generation has other debt concerns. According to the 2018 Planning and Progress Study from Northwestern Mutual, credit card debt outpaces student loan debt for older millennials (ages 25-34).

Among older millennials, credit card balances make up one-quarter of the average debt burden, compared to the 16% burden from student debt.They also carry more personal debt ($42,000) than the average personal debt of $38,000.

In some ways, this finding makes sense. Younger millennials are just starting their careers and beginning to pay down their stude…

2 Out Of 5 Student Borrowers Expected To Default In Next 5 Years

MoneyTips

America’s cumulative student loan debt has topped $1.5 trillion, surpassing credit card debt as the second greatest debt burden behind mortgages. How will we pay it off? A study by the Brookings Institution suggests that approximately 40% of Americans won’t be able to pay off their loans and will end up in default by 2023. That’s just five years away.

Student loan default rates are typically reported as three-year cohort default rates, defined as the risk of a student loan holder defaulting within the end of one or two fiscal years after the year they enter the repayment stage. For a student debtor whose grace period ends in 2018, the default rate for the 2018 cohort will report the default rate for that group from 2018 through 2020 (a three-year cohort).

Reported this way, student loan default rates are down from a 14.7% peak in 2013 (2010 cohort) to 11.5% in 2017 (2014 cohort). That’s still bad – but a 2018 study by the

From Foreclosure To 800 Credit Score

MoneyTips

“I raised my credit score over 800 – and you can, too!” So says Tiffany Aliche, a financial speaker and author better known as The Budgetnista.

Tiffany was working as a schoolteacher, and had excellent credit, until she lost her job in the Great Recession. “I had a choice between paying my mortgage and paying my bills. I chose to pay my bills.” Due to trusting the wrong person, those bills included $30,000 in credit card debt. As she collected unemployment, she did her best to cut her expenses to the bone, losing her home to foreclosure.

“I moved in with my family, crashing on a sister’s couch, and at my parent’s home. I scrimped and saved. I stopped buying clothes. With four sisters, I could always borrow an outfit when I needed one!

“I watched videos to learn how to do my hair and other skills myself instead of paying for them. YouTube became my university. I was in my 30’s, when peo…