More Millennial households in the US are in poverty

[StatGuy2000]

In fairness to the rest of us, you didn't provide much to go on and proposed a change in direction but then didn't actually provide the change in direction, so the thread has been meandering since then. You can always get it on the track you wanted it by providing it.

My intention in this thread was to specifically discuss poverty rates in the US among Millennials, what are the factors involved in such, and means of suggestions on how we could alleviate poverty. Instead, the perception I have is that because there is a greater level of poverty among Millennials in comparison to other generational groups in comparison to when they were at the same age bracket (thus countering your point in an earlier thread about younger people earning less than than older people), that somehow this is "their fault". Curiously, this train of thought is prevalent among Americans -- perhaps a holdover from the Horatio Alger-type myths?

The stats show millenials delaying the "adult" actions like getting out of their parents' houses, buying their own houses, getting married, having kids, etc. This creates a perception of not wanting to grow up, which is interpreted as too lazy to grow up. While I think some of the criticism is valid, it is more complicated than that. Student loan issues are no doubt part of the "problem". Another is probably women's lib and fertility treatment improvements.

I both agree and disagree with your sentiments above. Yes, the stats certainly show that Millennials are delaying "adult" actions like getting out of their parents' houses, buying their own houses, getting married, etc. That's not disputed. What I dispute is the notion that these Millennials are seen as lazy because of it.

As you have stated, the fact that Millennials are disproportionately burdened by student loans (due to tuition rates that have arisen far faster than tuition, which is itself due to large-scale cuts in funding to state universities in the US) is widely dismissed but is a reality among these people, followed by relative lack of economic opportunities to establish themselves (particularly during the Great Recession of 2008, which disproportionately affected Millennials during a key period of their lives when they would otherwise have been entering the workforce). Wouldn't it be more accurate to say that instead of Millennials mooching off their parents, that they are forced to live with them because they can't afford to move out?

Additionally, there are places in Canada (which did not experience the collapse in housing prices like in the US during the Great Recession), you have home prices that have been booming, which has resulted in many people being priced out of the market, especially in cities like Toronto or Vancouver, and we're seeing similar trends in certain regions in the US like San Francisco. That's a factor that needs to be considered.

Finally, I'm confused by what you mean about women's lib and fertility treatment improvements. I don't see how that is at all relevant to the discussion of poverty rates among Millennials.

 

[Evo]

my parents were born in '50. With high school education they essentially "fell into" great careers that afforded them a house, kids and even some extras like a boat extra car latest gadgets, fashion, furniture ect.

With post secondary in bus. admin. I've yet to achieve either of their salary...unadjusted... :/

Today both of the careers they were in now pay about 25k less, unadjusted.

Actually this is a very good point and something I often bring up when speaking with younger people about how much harder it is to get and keep a job now compared to when I was their age. Of course (and no, I don't have the statistics), but it seems that there are less jobs and more applicants. So many large companies have drastically downsized their workforce. You now have one person assigned what used to be the work of 2-3 or even more people. I survived many downsizings before I finally retired. And by that time I had taken over close to 5 former employees accounts/responsibilities. I was coming into work around 6 am and sometimes staying until 9pm, and working weekends, I was salaried management, so I did not get paid more for working the extra hours, but it was probably why I kept surviving the layoffs. And yes, your point about them hiring a younger person for the same position at a lower pay level is also something I witnessed. Yes, you expect to be started off at less than someone that has been there longer, but we're talking about the starting pay being significantly lower than in previous years, although there was actually more work required.

Both of my kids are Millenials as are their friends and I've never seen a harder working more motivated, smarter group of people. But as I also previously said, I have known many in that age group that are among the laziest and most entitled of any age group I've known. Well, with the exception of a few baby boomers I worked with that I wouldn't say were lazy as much as they were just dumber than rocks and just incapable of doing their job. They were lucky they were hired when anyone that could breathe could get a job just by applying, how they held onto their jobs as long as they did was mind boggling.

 

[russ_watters]

My intention in this thread was to specifically discuss poverty rates in the US among Millennials, what are the factors involved in such, and means of suggestions on how we could alleviate poverty.

Great. That's a direction.

But just to be clear, here, my complaint is that you are providing conclusions and commentary without the starting data and analysis. You still haven't specifically cited the data you are referring to to make sure we're all on the same page about the factual basis of what we are discussing. I know V50 and I have provided some, but its not enough for us to provide it and then you not to cite if it is what you were after. All this needs is a handful of bullet points of stats, their associated dates and a couple of sentences tying them together. You're skipping these steps. This forces the rest of us to choose to:
1. Respond to the commentary as-is by assuming you've done the analysis even though you haven't posted it (or even linked the correct article, which implies you haven't!).
2. Look for the data and do our own analysis to see if it matches what you seem to be saying about it.

As you are no doubt aware, stats are not straightforward, use-in-a-vacuum facts. They have to be interpreted in context in order to understand what they mean. THEN it is appropriate to move forward to discuss what to do about it. Your skipping the steps and/or putting the onus on us to do it for you is in bad form, particularly since it doesn't seem like you have a grasp on them yourself. Plese, please! start giving us the data and your direct interpretation of it. This is a worthy topic of discussion and I don't want to have to close it because it meanders/is of poor quality.

So please, please!: if your intention is to discuss poverty rates among Millenials (in comparison with other age groups? With other age groups at their arge?) post and cite specifically the data you are referring to!

Instead, the perception I have is that because there is a greater level of poverty among Millennials in comparison to other generational groups in comparison to when they were at the same age bracket (thus countering your point in an earlier thread about younger people earning less than than older people) that somehow this is "their fault".

Per the above: Cite your data. I don't want to make this an "is not"/"is too" debate (that's what I'm trying to fix!), but I don't think the data says what you think it does and until you show me the numbers you are referring to, I don't accept your interpretation.

Yes, the stats certainly show that Millennials are delaying "adult" actions like getting out of their parents' houses, buying their own houses, getting married, etc. That's not disputed. What I dispute is the notion that these Millennials are seen as lazy because of it.

As you have stated, the fact that Millennials are disproportionately burdened by student loans (due to tuition rates that have arisen far faster than tuition, which is itself due to large-scale cuts in funding to state universities in the US) is widely dismissed but is a reality among these people, followed by relative lack of economic opportunities to establish themselves (particularly during the Great Recession of 2008, which disproportionately affected Millennials during a key period of their lives when they would otherwise have been entering the workforce). Wouldn't it be more accurate to say that instead of Millennials mooching off their parents, that they are forced to live with them because they can't afford to move out?

No. And this is my #1 complaint of this group and wider, of a lot of Americans. This is America (btw, you're Canadian, right? I always associated your attitude with Southern North America, not Northern North America, but it seems to fit up there too). Nobody is "forced" into life choices here. We get to make our own. What changes is the input data that helps us decide those choices. And living with your parents above aged 30 is a big benchmark of that: nobody with a full-time job* and no real emergency (like an illness or unplanned kid) needs to be living with their parents above age 30 (and few people from 25-30). Can't buy a home at 25? Fine!: get an apartment. Can't afford an apartment on your own? Fine!: Get a roomate. Can't find a real job because you were a philosphy/art history major and only finished a BA? That's tougher to escape, but it is still a life choice people made that put them in their situation.

People who take ownership of their lives do better in life. People who blame others/circumstance have less incentive to try to do better because they don't believe it will help. Both are self-fulfilling.

The trend of delaying adulthood is real and predates millenials, so it cannot be blamed entirely on the recession. I'm 42 and I've seen friends/acquaintences in my age bracket make immature/selfish/passive life choices in their 20s and 30s that likely would have horrified Boomers.

One of my best friends is unmarried at 43 and works at an aquarium (without a marine biology degree) and rents a room in someone's house. Why? When he was in his mid-20s he decided he didn't like his advertising job and quit (despite being offered a raise to stay), started volunteering and then got a full-time job. He still hasn't gotten back to the standard of living he had when he worked in advertising. Now I don't know if he's currently happy or unhappy with that decision (I think he's happy with it, but don't know if he really thinks it through), but his failure to move out of his income quintile - when I've moved up 3 in the same period - is all on him and his decision.

*By comparison, I got out of the Navy and moved in with my parents in the fall of 2002, when I was just short of 27. I dropped my green duffel bag on the floor and hugged my mom. She said: "nice to have you home, but I'm not excited to see all your stuff back in the house." I replied; "don't worry, me and my stuff aren't staying long." I got a job exactly 2 months later and moved out exactly 3 months after that. We had briefly talked about me paying rent, but they never got a chance to implement it before I left. At the time, the unemployment rate was about 6% as we were emerging from the minor 2002 recession. The last time it was that high was three years ago. Today, it is 4.1%. I didn't have student loan debt (had some credit card debt), but I also didn't take a roommate: getting a roomate would cover $500/mo in additional debt.

That's why I have so little sympathy. Today, for a millenial to be living with their parents above aged 25, they pretty much have to be doing something wrong/making a choice to be in that situation. The economic issues that were relevant in 2008-13 are not relevant to that today. You can say, wow, it sucks they lost 5 years to a bad economy, but so what? I lost 4 years to a poor path through college/the Navy (some people enlist by choice though and I do think it is positive). I got on my feet in 5 months. So what have millenials living with their parents been doing for the past 2.5 years?

Finally, I'm confused by what you mean about women's lib and fertility treatment improvements. I don't see how that is at all relevant to the discussion of poverty rates among Millennials.

Womens' lib and fertility treatments take marriage/kid pressure off of women. It is part of the reason the age of marriage/kids has been rising for decades: women don't feel like they need to do it in their 20s and can instead do other things like get established professionally, be choosier about their spouse pick or party. This is a major part of the cause of what we are discussing - probably the most significant portion of the ongoing shift (everything unrelated to the recession).

And, bonus: it should be reducing financial pressure to help overcome the additional challenge of higher student loan debt.

 

[russ_watters]

That's responsible behavior; you are no longer "A Millennial."

Lol, Millenial/Probationary Adult Status revoked! Congrats!

 

[Greg Bernhardt]

My wife is a millennial. She is a highly educated, brilliant and experienced Montessori teacher 7 years out of college. Still well in debt making $30k a year in public schools. Puzzling how we disrespect quality teachers.

 

[russ_watters]

lol I see irony in the complaints about millennials behaviour and attitude; as if they raised themselves, provided their own ideals and instilled their own work ethic.

Excellent point: raising kids in a bubble seems like it started in the 80s and results in grown adults who have never had to "deal" and "can't even". And that issue appears to be continuing to get worse.

 

[gleem]

I mentioned this before but the stats in the OP relevant to poverty are given in the total number of household for a given generation. Since Millennials are more numerous (up to 20% more than GenX) the Millennial's poverty rate is in line with GenX and even close to the Boomers. Also as noted earlier most new home buyers are Millennials. So what is the problem?

I got on my feet in 5 months. So what have millennials living with their parents been doing for the past 2.5 years?

Saving their money to buy 40% larger homes and SUV's?

We who have been successful due to diligence and hard work can pontificate at the slackers and perhaps justifiably But let us not forget other possibilities for lack of success.

******************************************

Pray, don't find fault with the man that limps,
Or stumbles along the road.
Unless you have worn the moccasins he wears,
Or stumbled beneath the same load.

There may be tears in his soles that hurt
Though hidden away from view.
The burden he bears placed on your back
May cause you to stumble and fall, too.

Don't sneer at the man who is down today
Unless you have felt the same blow
That caused his fall or felt the shame
That only the fallen know.

You may be strong, but still the blows
That were his, unknown to you in the same way,
May cause you to stagger and fall, too.

Don't be too harsh with the man that sins.
Or pelt him with words, or stone, or disdain.
Unless you are sure you have no sins of your own,
And it's only wisdom and love that your heart contains.

For you know if the tempter's voice
Should whisper as soft to you,
As it did to him when he went astray,
It might cause you to falter, too.

Just walk a mile in his moccasins
Before you abuse, criticize and accuse.
If just for one hour, you could find a way
To see through his eyes, instead of your own muse.

I believe you'd be surprised to see
That you've been blind and narrow minded, even unkind.
There are people on reservations and in the ghettos
Who have so little hope, and too much worry on their minds.

Brother, there but for the grace of God go you and I.
Just for a moment, slip into his mind and traditions
And see the world through his spirit and eyes
Before you cast a stone or falsely judge his conditions.

Remember to walk a mile in his moccasins
And remember the lessons of humanity taught to you by your elders.
We will be known forever by the tracks we leave
In other people's lives, our kindnesses and generosity.

Take the time to walk a mile in his moccasins.

"Judge Softly"

Mary T. Lathrap 1895.

Thank you liberal education.

 

[russ_watters]

I mentioned this before but the stats in the OP relevant to poverty are given in the total number of household for a given generation. Since Millennials are more numerous (up to 20% more than GenX) the Millennial's poverty rate is in line with GenX and even close to the Boomers. Also as noted earlier most new home buyers are Millennials. So what is the problem?

Yes, I think we've well covered that we got off to a bad start. Hopefully we'll get a good course correction with better stats...

Saving their money to buy 40% larger homes and SUV's?

We who have been successful due to diligence and hard work can pontificate at the slackers and perhaps justifiably But let us not forget other possibilities for lack of success.

I did caveat the statement by pointing out it didn't apply to people who've had a real emergency/hardship, but that is generally only a few percent and is relatively constant over time (though some hardships are decreasing over time). So it shouldn't factor much here.

I will throw another log on though and point out that the whole idea of "generations" is pretty pointless, at least in the post-Baby Boom era. In WWII, 16 million people served (1.1 million didn't come home whole or at all) and everyone on the homefront was profoundly affected. This then created the Baby Boom generation. These have had real/significant demographic and formational impacts on the USA (and other countries).

My generation (generation X) is united by...our shared experience watching "Brat Pack" movies? Sorry, but that's just not a significant binding force. The current "Stay off my lawn you crazy kids!" is a media creation, fanning both sides. The links that started this thread were basically clickbait to fan the "woe is me" feeling that the "millenials" have - but shouldn't - while others are intended to play-up the laziness and "Stay off my lawn!" angle.

Edit:
Though much is clickbait, I still blame millenials for being fooled by it. This "woe is me" tale just isn't as big of a deal as they think it is. Yes, it was the worst recession since the Great depression, but not by a lot (it is a lot closer to prosperity than it is to the Great Depression), and did it really hit millenials harder than a 35 year old with two kids and a $100k layoff?

And as rough as it may have been to waste a couple of years playing xbox in your parents' basement because the best you could do was a part time job at Target, do you [any random millenial] really think that's worse than spending a good fraction of your formative early adulthood in a ditch in France with bullets wizzing over your head? Sorry, but you're going to have to come up with a better tale of woe!

 

[StatGuy2000]

Great. That's a direction.

But just to be clear, here, my complaint is that you are providing conclusions and commentary without the starting data and analysis. You still haven't specifically cited the data you are referring to to make sure we're all on the same page about the factual basis of what we are discussing. I know V50 and I have provided some, but its not enough for us to provide it and then you not to cite if it is what you were after. All this needs is a handful of bullet points of stats, their associated dates and a couple of sentences tying them together. You're skipping these steps. This forces the rest of us to choose to:
1. Respond to the commentary as-is by assuming you've done the analysis even though you haven't posted it (or even linked the correct article, which implies you haven't!).
2. Look for the data and do our own analysis to see if it matches what you seem to be saying about it.

As you are no doubt aware, stats are not straightforward, use-in-a-vacuum facts. They have to be interpreted in context in order to understand what they mean. THEN it is appropriate to move forward to discuss what to do about it. Your skipping the steps and/or putting the onus on us to do it for you is in bad form, particularly since it doesn't seem like you have a grasp on them yourself. Plese, please! start giving us the data and your direct interpretation of it. This is a worthy topic of discussion and I don't want to have to close it because it meanders/is of poor quality.

So please, please!: if your intention is to discuss poverty rates among Millenials (in comparison with other age groups? With other age groups at their arge?) post and cite specifically the data you are referring to!

Per the above: Cite your data. I don't want to make this an "is not"/"is too" debate (that's what I'm trying to fix!), but I don't think the data says what you think it does and until you show me the numbers you are referring to, I don't accept your interpretation.

In my very first post in this thread, I have provided information from Pew Research regarding poverty among households headed by Millennials, and I provided my interpretation of what the numbers/statistics reported in Pew Research implied to me. If you disagree with my interpretation -- that is fine, we can all make our own judgments -- but I feel like I've cited my sources.

If you're asking me to dig deeper -- well, I'm posting in between work projects, and I'll have to spend a considerable amount of time doing research, so everyone here on PF will have to wait!

No. And this is my #1 complaint of this group and wider, of a lot of Americans. This is America (btw, you're Canadian, right? I always associated your attitude with Southern North America, not Northern North America, but it seems to fit up there too). Nobody is "forced" into life choices here. We get to make our own. What changes is the input data that helps us decide those choices. And living with your parents above aged 30 is a big benchmark of that: nobody with a full-time job* and no real emergency (like an illness or unplanned kid) needs to be living with their parents above age 30 (and few people from 25-30). Can't buy a home at 25? Fine!: get an apartment. Can't afford an apartment on your own? Fine!: Get a roomate. Can't find a real job because you were a philosphy/art history major and only finished a BA? That's tougher to escape, but it is still a life choice people made that put them in their situation.

People who take ownership of their lives do better in life. People who blame others/circumstance have less incentive to try to do better because they don't believe it will help. Both are self-fulfilling.

The trend of delaying adulthood is real and predates millenials, so it cannot be blamed entirely on the recession. I'm 42 and I've seen friends/acquaintences in my age bracket make immature/selfish/passive life choices in their 20s and 30s that likely would have horrified Boomers.

One of my best friends is unmarried at 43 and works at an aquarium (without a marine biology degree) and rents a room in someone's house. Why? When he was in his mid-20s he decided he didn't like his advertising job and quit (despite being offered a raise to stay), started volunteering and then got a full-time job. He still hasn't gotten back to the standard of living he had when he worked in advertising. Now I don't know if he's currently happy or unhappy with that decision (I think he's happy with it, but don't know if he really thinks it through), but his failure to move out of his income quintile - when I've moved up 3 in the same period - is all on him and his decision.

*By comparison, I got out of the Navy and moved in with my parents in the fall of 2002, when I was just short of 27. I dropped my green duffel bag on the floor and hugged my mom. She said: "nice to have you home, but I'm not excited to see all your stuff back in the house." I replied; "don't worry, me and my stuff aren't staying long." I got a job exactly 2 months later and moved out exactly 3 months after that. We had briefly talked about me paying rent, but they never got a chance to implement it before I left. At the time, the unemployment rate was about 6% as we were emerging from the minor 2002 recession. The last time it was that high was three years ago. Today, it is 4.1%. I didn't have student loan debt (had some credit card debt), but I also didn't take a roommate: getting a roomate would cover $500/mo in additional debt.

That's why I have so little sympathy. Today, for a millenial to be living with their parents above aged 25, they pretty much have to be doing something wrong/making a choice to be in that situation. The economic issues that were relevant in 2008-13 are not relevant to that today. You can say, wow, it sucks they lost 5 years to a bad economy, but so what? I lost 4 years to a poor path through college/the Navy (some people enlist by choice though and I do think it is positive). I got on my feet in 5 months. So what have millenials living with their parents been doing for the past 2.5 years?

First of all, to clarify, I'm a dual American/Canadian citizen (I was born in Japan to an American father from the Detroit suburbs in Michigan and a Japanese mother, raised in Canada, and became naturalized Canadian citizen). So I'll let you and others decide if that makes me an American in your eyes (legally I am unambiguously).

At any rate, I disagree with the notion that people are not forced to make certain choices over others. For example, here in Toronto, where I live, I occasionally come encounter homeless youths living on the streets. In many of these cases, these youths are runaways fleeing abusive situations in their home. Sure, these kids could have "chosen" to endure the abuse (or end up being killed by their abusers -- it is often a life or death choice), but are you seriously implying that these kids really had much of a choice? Now granted, this is an extreme example, but let's take a more relevant one.

Suppose someone has graduated from college/university, with a degree in, say, physics (since we are here on PF). Let's assume that said student graduated from the University of Toronto (my alma mater), with debt in the tune of $80000 CDN (a conservative estimate based on tuition, residence, incidental fees, books & school supplies, and supplemental health insurance provided by the school for its students) at the age of 22. Suppose that she finds a job in Toronto whose starting salary is $30000 per year (a not-unheard of salary for those fresh out of school, if a little on the low end). Rent in Toronto for a 1-bedroom apartment is approximately $1800 per month, and not much cheaper for the surrounding municipalities. Our income tax is about 70%, so her take-home pay per month is approximately $20000 per year. Now $20000/12 = $1667 < the monthly rent. That means that she cannot afford to pay rent, let alone pay off her student debt or pay for her food, heat, electricity, etc.

So basically her choice would be to either:

(a) live with her parents for however long it takes to pay off her student debt and hope that her salary rises so that she can afford to rent and eat, or stay long enough to some day afford a home (note: that the average price for a single detached house in Toronto is > $1,000,000),

(b) scrounge to find a roommate

(c) seek public housing assistance

(d) find someplace where she can both work and afford to live

or (e) be homeless

Now none of these choices are particularly great choices, so I don't fault people who chooses to live with their parents after graduation to pay off their student debt (and yes, it could take until such people are about 30 to pay off that student debt and save to buy that home). Perhaps because you live in a part of the world where home prices are less expensive (I don't know housing prices where you are, but I bet they are considerably less expensive than houses in much of southern Ontario, Canada where jobs are actually available).

 

[Vanadium 50]

, the fact that Millennials are disproportionately burdened by student loans (due to tuition rates that have arisen far faster than tuition, which is itself due to large-scale cuts in funding to state universities in the US) is widely dismissed but is a reality among these people

The average student loan is $30,000. The average new car loan is also about $30,000 (and there are many more of them, even when restricted to 18-34s). Why is the former a crisis, but the latter not?

 

[StatGuy2000]

The average student loan is $30,000. The average new car loan is also about $30,000 (and there are many more of them, even when restricted to 18-34s). Why is the former a crisis, but the latter not?

I did a quick Google search, and according to the student support organization College Board, published tuition fees for the 2014/2015 average tuition fees in state colleges/universities in the US is $9,139 for state residents and $22,958 for everyone else.

Let's just take state residents for the time being. That means that tuition alone, their full tuition burden is $9139 x 4 = $36,556. That's just tuition -- if you could books/school supplies, residence/housing, food, etc, we could easily be talking about costs running into $80,000 - $100,000 (and this is for state residents, never mind for out-of-state students). And much of that funding will be coming out of student loans. So I find it hard to believe that the average student loan is only $30,000.

 

[russ_watters]

In my very first post in this thread, I have provided information from Pew Research regarding poverty among households headed by Millennials, and I provided my interpretation of what the numbers/statistics reported in Pew Research implied to me. If you disagree with my interpretation -- that is fine, we can all make our own judgments -- but I feel like I've cited my sources.

Your post contains no numbers and roughly half a sentence of analysis. And I think we later established (after you pointed out a click-through link) that the first link wasn't even relevant to your point. I cannot fathom how you could possibly believe that represents sufficient depth.

 

[Vanadium 50]

So I find it hard to believe that the average student loan is only $30,000.

Source: http://money.cnn.com/2016/10/18/pf/college/average-student-loan-debt/index.html

Note that this is the average student debut among borrowers. Since only 2/3 borrow, the average debt among graduates is lower. (Probably around $20K)

So now that we have established the numbers, why is $30K in student loans a crisis, but $30K in car loans not?

 

[WWGD]

Source: http://money.cnn.com/2016/10/18/pf/college/average-student-loan-debt/index.html

Note that this is the average student debut among borrowers. Since only 2/3 borrow, the average debt among graduates is lower. (Probably around $20K)

So now that we have established the numbers, why is $30K in student loans a crisis, but $30K in car loans not?

I don't know to what extent we have established them. From your link:
" ...The report might underestimate the average debt. It excludes students who went to for-profit colleges, because so few of those institutions report relevant data. But a majority of for-profit students do borrow money."

But I don't see the reason to go to a private school, when a state school is often just as good; according to mazon.com/Higher-Education-Colleges-Wasting-Kids/dp/031257343X
Classes at the top tier schools, who advertise Nobel Laureates in their staff, are often taught by TAs most of whom took the class a few semesters prior. Seriously,do you think a Nobel Laureate will be interested in talking to Bob undergraduate about Bob's Calc exam? Most likely s/he will be talking with colleagues , travelling, or working in their own research. No one seems to understand the fact that teachers/profs. are hired based on the research they conduct and the money they bring to the school, not because of their credentials/ability/skills as educators. An internet connection, together with self-motivation is, I believe, nowadays, the great equalizer. And it seems like a top-Tier-level education does provide an initial bump for students, but, some 10 years after they have obtained their degrees, most students will be, by many measures, doing as well as their State U counterparts. Besides, if you study at State U , U may be able to live at home, maybe-hopefully working a side job to help pay some rent to Mom and Dad, without paying for fancy dorms with Whirlpools, etc.
EDIT: Another cheaper path is that of starting at a 2-yr Community College and then transferring to College for the ensuing 2 years.

 

[Vanadium 50]

According to the U.S. Education Department's National Center for Education Statistics, 10% of college students are at for-profits, and the average tuition at a private for-profit is $16K, compared to $8K public in-state, $18K public out-of-state and $23K for private not-for-profit. Even if you imagine that comparable costs somehow lead to larger loans, the vast majority (90%) of students don't attend these schools.

So why is $30K in student loans a crisis, but $30K in car loans not?

 

[WWGD]

So why is $30K in student loans a crisis, but $30K in car loans not?

I am not the OP in this regard, but you do obtain benefits from your car from the get-go, while you have to usually wait a few years to get the benefit of a college degree? A car pays for itself much faster than a college degree, and both have costs associated to the benefit ( Gas, Insurance for cars, loans + interest for College) both, I believe, averaging around $9000/year.

 

[Greg Bernhardt]

So now that we have established the numbers, why is $30K in student loans a crisis, but $30K in car loans not?

What's the average age of someone applying for a 30k student loan vs a 30k car loan?

 

[StatGuy2000]

Your post contains no numbers and roughly half a sentence of analysis. And I think we later established (after you pointed out a click-through link) that the first link wasn't even relevant to your point. I cannot fathom how you could possibly believe that represents sufficient depth.

First off, the very purpose of this post is to post my opinions on specific subjects. Opinions are that, opinions, and therefore should not fall under the same scrutiny that, say, a publication in a journal would involve. We have both posted opinions on various subjects before, and I don't think my post has any less depth than others.

I have no issue with your critiquing or criticizing my opinions, or offering differing opinions of your own (nor am I shy to offer my own distinct opinions). So long as we do so in a civil, respectful manner, I don't see what the issue is.

 

[Vanadium 50]

What's the average age of someone applying for a 30k student loan vs a 30k car loan?

I don't know the loan breakdown by dollar by age. Industry trades indicate that 18-34s are a) buying new, b) leasing more, and c) financing longer. So it's unlikely to be a huge effect. But I've noticed something interesting. I've posted actual statistics. The response is not "here are better numbers" - they are "those must be wrong, because they don't fit the narrative" - the narrative being the previously mentioned hipster, who through no fault of his own is left living in his parents' basement because he has no prospects.

What I have I posted?

• Demographic shifts are in the right direction and have the right magnitude to explain most - and quite likely all - of the changes in poverty numbers. The reason the poverty numbers are going up is driven more by the changing demographics of the 18-34's than the plight of our hipster friend.
  
• The average size of student loans is comparable to car loans. Why is only one of them considered permanent, crushing debt?

To continue, some other relevant factors for our hipster's plight:

• College costs have gone up, to be sure. The amount of work needed to get a degree has gone down. Shouldn't we consider both of these together?
• In addition to the net amount of work going down, the utility of majors is shifting. There are 122 universities in the US that offer a major in film. In 1980 there were more like ten: Northwestern RTVF, USC, UCLA, NYU, Columbia, a few others.

 

[russ_watters]

First off, the very purpose of this post is to post my opinions on specific subjects. Opinions are that, opinions, and therefore should not fall under the same scrutiny that, say, a publication in a journal would involve.

What you were saying in your first post that was problematic was not opinion: it was claims of facts that you didn't provide support for. That isn't acceptable here. At all. Anywhere on the forum. In the real world, you can base an economic opinion on a bumper sticker claim of fact that might not even be true, but not here. Even if the claims were throw-aways that you really didn't want to discuss (preferring to skip right to the opinion).

We have both posted opinions on various subjects before, and I don't think my post has any less depth than others.

Almost by definition, "depth" is how much information you provide. You must see that while your post contained no numbers, several of us responded with posts contining numbers. They are most certainly not equivalent levels of depth.

I have no issue with your critiquing or criticizing my opinions, or offering differing opinions of your own (nor am I shy to offer my own distinct opinions). So long as we do so in a civil, respectful manner, I don't see what the issue is.

Civil and respectful is difficult if people are following different rules/expectations, particularly when they are less strict than what the rules really allow for. This is the reason we finally did away with the politics section. It was too difficult to keep the quality up.

Your refusal to provide what others are providing is unfair, disrespectful and does not meet the requirements of the forum.

 

[nitsuj]

The average student loan is $30,000. The average new car loan is also about $30,000 (and there are many more of them, even when restricted to 18-34s). Why is the former a crisis, but the latter not?

Because in an extreme case I can park the car, call the loaner and say "Come pick up your car, I am done with it." I know of a real world example of such a case involving a "young" car brand and a lemon of a car...funny thing the loaner never repossessed it...must not have been worth it compared to writing off the debt.

It's VERY clear cut when a tangible asset is impaired, it is not as clear cut when education earning potential is impaired...but perhaps too easy to think the person must just be lazy, unmotivated ect.

I would absolutely trade all that I learned in college for the debt and choose a different earnings path.

 

[Bystander]

I would absolutely trade all that I learned in college for the debt and choose a different earnings path.

? Say again?

 

[nitsuj]

Suppose someone has graduated from college/university, with a degree in, say, physics (since we are here on PF). Let's assume that said student graduated from the University of Toronto (my alma mater), with debt in the tune of $80000 CDN (a conservative estimate based on tuition, residence, incidental fees, books & school supplies, and supplemental health insurance provided by the school for its students) at the age of 22. Suppose that she finds a job in Toronto whose starting salary is $30000 per year (a not-unheard of salary for those fresh out of school, if a little on the low end). Rent in Toronto for a 1-bedroom apartment is approximately $1800 per month, and not much cheaper for the surrounding municipalities. Our income tax is about 70%, so her take-home pay per month is approximately $20000 per year. Now $20000/12 = $1667 < the monthly rent. That means that she cannot afford to pay rent, let alone pay off her student debt or pay for her food, heat, electricity, etc.

Our income tax is no where near 30% for someone earning 30k. That's the 15% bracket (upto 45k next is 20% upto 93k!), for which there is a about 12k*15% in tax credits...in turn the rate is 18k*15% = 2.9k/30k = 9.6% effective rate...

Then that 80k in education expenses includes tax receipts for claiming the expense for tax credits...at 15% and is transferable to family. Education expenses today even includes the textbooks and bus passes!

Someone earning 30k is entitled to FULL retail sales tax refund (about 450$ a yr), also rent in ontario is eligible for a tax credit.

The provincial rate (ontario) is 5.05% upto 42k.

Done properly that imaginary girl wouldn't pay tax (it's source deducted so would have to wait until "tax season" for the repayment) for probably at least 3 years.

80k * 15% = 12k in tax credits that can carry forward to future tax years.
annual tax bill FED 30k-12k * 15% = 2.9k PROV 30k-10k * 5.05% = 1k Total 3.9k tax

12k in (non refundable) tax credits / 3.9k annual tax bill = 3 yrs of zero income tax. It would be longer due to income deductions for CPP and EI paid.

Also we don't pay income tax on the interest paid on a "student loan". same tax credit situation, interest paid * 15% = income tax deduction

 

[nitsuj]

? Say again?

lol I don't know how to reword it differently...which part is confusing? The give back the education part? Yea that's not possible and is the issue.

 

[Vanadium 50]

So why do you feel the education wasn't worth the money? More specifically, what changed your mind - you clearly felt it was worth the money when you enrolled and took out the loan.

 

[WWGD]

I don't know the loan breakdown by dollar by age. Industry trades indicate that 18-34s are a) buying new, b) leasing more, and c) financing longer. So it's unlikely to be a huge effect. But I've noticed something interesting. I've posted actual statistics. The response is not "here are better numbers" - they are "those must be wrong, because they don't fit the narrative" - the narrative being the previously mentioned hipster, who through no fault of his own is left living in his parents' basement because he has no prospects.

Still, now it is on you. You have repeatedly asked why a $30K loan for school is more crushing than a $30k loan for a car, and you have received two answers, and you have addressed neither.

 

[Greg Bernhardt]

So why do you feel the education wasn't worth the money? More specifically, what changed your mind - you clearly felt it was worth the money when you enrolled and took out the loan.

I can answer this in respect to my wife. She went to an expensive private liberal arts school. She graduated with honors from a top state high school. Even though she was a smart cookie she didn't really have a grasp of how all the pieces fit together in terms of financials and job market prospects. I think she would agree today that it would have been better to go to a good public university instead. Sure, it's her responsibility, but I don't think it's a unique story and it's hard for kids to see the long view when so much is uncertain and changing at that time in their lives.

 

[WWGD]

I can answer this in respect to my wife. She went to an expensive private liberal arts school. She graduated with honors from a top state high school. Even though she was a smart cookie she didn't really have a grasp of how all the pieces fit together in terms of financials and job market prospects. I think she would agree that it would have been better to go to a good public university instead. Sure, it's her responsibility, but I don't think it's a unique story and it's hard for kids to see the long view when so much is uncertain and changing at that time in their lives.

Hear, hear. In an ideal world we would only pay a reasonable price for not knowing better, specially when younger.

 

[Greg Bernhardt]

Hear, hear. In an ideal world we would only pay a reasonable price for not knowing better, specially when younger.

Indeed, my wife is leagues smarter than me and an amazing teacher with young kids, developing our next generation, and yes as a 30 year old she would be in fact living with her parents without our combined income.

 

[WWGD]

Indeed, in fact, my wife is leagues smarter than me and an amazing teacher with young kids, developing our next generation, and yes as a 30 year old she would be in fact living with her parents without our combined income.

Situations like this one are what turned me into a radical centrist. They illustrate well both sides/angles of many issues: the issue of personal responsibility as well as that of societal influence (insufficient guidance, false advertising). Neither seems to dominate influence-wise, i.e., the problem is not easily attributed to neither.

 

[opus]

For non millenials- did any of you get financial/life guidance in a formal setting such as in high school? I ask because it seems like people haven't the slightest clue on any form of fiscal discipline or responsibility. I wonder if having a mandatory class in high school would help this in a similar way that Sex Ed class informs students on STDs and pregnancy.

 

[WWGD]

For non millenials- did any of you get financial/life guidance in a formal setting such as in high school? I ask because it seems like people haven't the slightest clue on any form of fiscal discipline or responsibility. I wonder if having a mandatory class in high school would help this in a similar way that Sex Ed class informs students on STDs and pregnancy.

It may be the only sustainable way of going about. I used to intern at a place that aimed for just this, educating younger people about finance and providing them with access to many of the resources mostly the rich have access to. If boss hadn't been such an #@$ , I would still be working there.

 

[nitsuj]

So why do you feel the education wasn't worth the money? More specifically, what changed your mind - you clearly felt it was worth the money when you enrolled and took out the loan.

It's taken twelve yrs for me to get to an income lvl where the loan payment is "painless" financially. And that is average income lvl for the city I live in.

I feel over that time, it's the experience that's paying me more.

Two crucial components in the education I got. The jargon and two statistics courses.

I've come to see that a bus admin - accounting diploma is about as valuable as a degree in psychiatry...it's only half the required education to get to "good investment" levels of income.

I accept it was my choice for the loan, however tempted. At what income level and after what amount of time does the law say "Okay this debt is pooched." it's zero and never...fun game :D

Now let's have a look at the small business bankruptcy game...I've seen first hand how easy it is for a small business rack up bills, claim bankruptcy, open a new small business in a new area and do it all again...all within the law.

Instead of getting a student loan directly, I should've opened a small business, that brokers loans for education ;) that's learned from experience, conceptually wasn't taught in college...though it would have been an invaluable part of the mandatory 235$ orientation course...

 

[russ_watters]

I’m going to take the unusual step here to re-writing the OP in the level of quality and rigor I think the forum rules require and respectful treatment of readers deserves. I’ll do my best to match the intent of the OP, just in higher quality and more depth, while being succinct enough to be a reasonable. Please note: I don’t mean any offense by this, but I may be including statements I know to be erroneous and analysis I believe to be faulty/misleading/incomplete based on my perception in the thread – even things already pointed out. It will also mix-in quotes and paraphrases from the actual OP. This is all intentional to write this as a re-do of the starting point. I’ll also provide a little bit of structural guidance (and associated explanation) that wouldn’t typically be included in order to highlight the structure. I don’t actually advocate following a real template. This is intended to be serious; I will not throw in any “how could you do this to us you evil baby boomers!” silly shots in unless I think they truly, accurately reflect the intent of the OP. So, here we go:

-------------------------------

By Statguy2000 via Russ Watters

Intro
Hi everyone. I thought I'd point out some disturbing news related to the Millennial generation (those born in 1980 and afterwards) in the US:

Fact(S) to be Discussed [1]

http://www.pewsocialtrends.org/2011/11/07/chapter-2-income-poverty-employment/

Over time, more of those in the younger generations (under 35) are in poverty even as the older generations (over 65) have been improving. 30 years ago, the poverty rate for these groups was about equal at 17% whereas today the poverty rate among millennials is 22% and the poverty rate for baby boomers is about 11%. There is a lot of related contextual information in the multi-page article linked and I encourage everyone to read at least the page linked, on income, poverty and employment rates for more insight. [2]

Analysis of the Facts [3]
The graph shows long-term, continuous decline in the standard of living of young people that cannot be explained away as temporary due to the Great Recession or caused by “lazy millennials”.

Extension/Prediction [4]
This shows permanent injury to millennials that will in the future reverse the trend of improving standard of living for older people, causing millennials to spend their entire lives at lower standards of living than their predecessors.

Reaction [5]
What is striking is how this is not causing greater alarm with the broad fabric of American society that the younger generation has fewer opportunities for advancement and are living in poverty.

The end

---------------------

You should all note that this sample post contains most of the words of the OP verbatim, just more detail and a clear separation between facts and opinions. This clear separation is maintained even if you remove the headers from each section. And its not even a lot longer; take away the image and it is perhaps only twice as long.

[1] Just the facts. No reaction, analysis, anything. Just the actual data, a link to the data and its background and a re-stating of the facts in my own words. This is intentionally dry in order to start the discussion off from a place of agreement; everyone should agree that facts are facts. And everyone must be afforded the opportunity to look at the facts being claimed. If we can’t even agree on a starting point and/or people aren’t given an opportunity to look for themselves, the discussion is unlikely to become productive.

[2] Everything to this point is the minimum I would consider acceptable as a starting point for discussion. It at least tells everyone reading what the topic data is and where the data came from. The next section is preferred but it is more common for people to just take a glance at facts and post an initial reaction without analyzing where the numbers came from and how they came to be.

[3] Analysis should be closely fact-adjacent, putting the facts in the context of other facts and describing relationships and trends. Still no opinions. I won’t call this section mandatory because it takes some analytical skill and emotional detachment to be able to provide opinion-free interpretation. It is a component of a high quality post, but is more than I think can realistically be expected from everyone.

[4] Here’s where the gloves start to come off. Predictions are by definition speculative and reflective of our biases, such as confidence level in the direction of a trend that isn’t consistent. This is where deviation from academic analysis really starts because for academic analysis, that’s not good enough: you need mathematical modeling, not gut instinct, to make the predictions. What I did here doesn’t even reflect trendlines the graphs could generate. This section I do consider mandatory.

[5] Here, the gloves are totally off. This is pure opinion and emotion. But since this isn’t the entirety of the content of the post, we have some real meat that came before it to understand where this opinion/reaction came from – and we [responsible responders] start at the top and work through, not at the bottom, trading emotional reaction punches in the dark. This section is optional and even discouraged, but is typically included.

So, @StatGuy2000 I invite you to take a day to review and edit this to make it your own, if you choose to. After that, I’ll respond to “your” new opening post. I sincerely hope people see this as a sincere explanation of what I'm looking to see. It's an unusual post, but an honest effort at a teaching moment.

 

[nitsuj]

View attachment 218206

That's the first I looked at the graph.

Clearly us millenials have been duped by those older and in positions that determine who gets paid how much.