Why do people get married before college
Bankrupt before starting your career
The turkey was already pre-ordered. On Thursday morning, the Moores filled it in the classic way, with celery, apple, onion and white bread. There were also sweet potatoes with marshmallows on top and salads. 19-year-old Jake Moore had been looking forward to it for weeks. The messy-haired young man has been at home with his parents and his younger sister Emma on Thanksgiving since Tuesday. He had never been gone that long. In late summer he moved out to study at the University of Vermont, in the northeastern United States, on the border with Canada. Her parents' home in New Jersey is a seven-hour bus ride south with one change. Jake uses the short semester break to take a deep breath before the exams before Christmas.
The majority of the 20 million college students in the United States who drive home for Thanksgiving feel similarly. Most arrive the day before, on the worst travel day of the year. But even if the sheet metal snakes are over, the stress is not over. Many American families are concerned with tiresome money. That has to be talked about. Because almost everyone is affected by the student loan crisis. The Moores too.
The middle class is being fleeced
A year of study at the University of Vermont costs $ 60,000, including food, dorm and books. However, only the very richest have to pay that much. The monstrous sum is reduced by means of financial aid. They are requested a few months before the start of the semester. The university takes a close look at the family's finances. Annual income, property values, income taxes and savings are offset against each other. According to a formula established by the legislature, this results in the “likely family contribution”. A poor family has nothing to pay for. The majority of those who are higher than that receive the cash from the "middle class".
With the Moors, the annual amount they have to pay for Jake's studies is $ 19,000. But the money isn't there. Jake's father is a store manager in a supermarket, his mother works as an accountant. The income is used to pay off the home mortgage - appraised $ 280,000 - and get on with everyday life. Two family vacations per year have been possible so far - one and a half weeks in summer, a few days in winter. But now compromises have to be made. "Reduce expenses and increase income," says Mother Moore, calculator in hand.
Father Moore has already taken on a second job for the Internet travel agent Lyft for the coming summer. On free weekends he drives a taxi. The Moores have always kept strict records. In the years when the children grew up, they couldn't put much to one side. Emma is now 14 years old. $ 100, sometimes $ 200, of parental income went to a college savings account at the end of the month. When Jake was in 11th grade, the family refinanced the home. This extended the term, but the monthly rate became smaller. "The bottom line is we can pay about 14,000 a year, the rest is debt," says Jake. "I have to pay that off after graduation."
A year before Jake graduated from high school, the stressful arithmetic began with college searching. "The weekends were full of it," says Jake. It felt like being in a hamster wheel to find out how to finance your studies, he recalls. Instead of meeting up with friends, he sat grumbling at the kitchen table with his parents. The question kept coming up: Is it even worth going into debt? But to studying, even on credit, there is only "the alternative of a lousy job," says Jake.
Growing pressure to perform
College graduates earn significantly more over the course of their lives than wage workers who enter the labor market straight out of high school. But not everyone can find a well-paid job with which they can repay their student debts. Those who cannot find a highly paid or even no job at all after graduation are dependent on "Hotel Mama" and have to move back home. The debt burden of college graduates makes life planning increasingly impossible. Fear of the future gnaws at many. Buying or renting an apartment - the first step towards independence - is out of the question, and neither is marriage or starting a family. Awareness of being deep in the red at the start of a career has an impact on health and family, according to various studies. According to a survey from September, more than half of the indebted university graduates did not see a doctor. About half refrained from buying a house. A third got stuck in a badly paid job. And a third decided not to start a family.
Jake knows that debt is a huge problem. He bites his lip and reveals his main goal at university: "Didn't miss a single course, good exam grades and networking" so that he doesn't have to spend a long time looking for a job. With about $ 20,000 in debt, he'll be leaving the university in three and a half years "and somehow pay it off." That's pretty little compared to his high school friends. He had met them the Tuesday after returning from Vermont. They celebrated their reunion until the early hours of the morning. The topic of money was also touched upon. One faces 50,000 bad guys, another 32,000, a third as many as Jake. "It's on your neck every day, it's a pressure that won't go away," says Jake. He refers to Mister Meru. The case got through all the media last year.
The Wall Street Journal reported on Utah dentist Mike Meru and his debt odyssey. Meru had successfully graduated from the University of Southern California ten years earlier, but with an enormous debt burden of over $ 600,000. Meru quickly found a top position in a group practice. Since then, according to the agreement, he has been transferring ten percent of his income to the lender every month, or $ 1,589.57. But the interest on debt rises and with it the mountain of debt that Meru's monthly installment can no longer pay off. The 38-year-old is therefore now over a million dollars in debt. When the 25-year term has expired, the amount will have doubled. Then, according to the agreement, the state will cancel its remaining debt - but for this Meru has to transfer 700,000 income tax.
Most high-income debtors extend their debt servicing if the conditions are right: good credit, stable monthly income and a good income-debt ratio. The refinancing rates are currently quite cheap for them at up to two percent. Another option is the one that the Utah dentist uses: adjusting the debt repayment rate to match income.
Everything done right and yet in debt
Money and finance played an important role early on for the Moors. At twelve, Jake took a third of his pocket money and whatever other small gifts he received, for example for his birthday: a third was put away for old age, a third went to the savings account and a third was left for the cinema and chewing gum. From the age of 15 he worked in the summer holidays, twice even in winter. His sister has followed in his footsteps. On the weekends she works as a babysitter for friends. She saves the money for college.
Everything done right and yet in debt. That is the fate of many graduates. The main reason is the unregulated private higher education system. Increasing tuition fees by three to five percent per year is a ritual that is almost taken for granted. Adjusted for inflation, they have risen by an average of 85 percent over the past 25 years.
Left-wing Democrats are discovering student loans as an issue
The study costs are therefore an election issue. The progressives among the Democrats have made appropriate reform proposals. Elisabeth Warren wants households with incomes less than $ 100,000 a year to get up to $ 50,000 off their student debt.
In the summer, Bernie Sanders presented his bill. He wants to cancel student loans for all 45 million Americans - from old to young. In addition, every high school graduate should have the right to a free bachelor's degree at a public university. The 78-year-old Sanders wants to finance the project with a speculation tax on Wall Street transactions. “In 2008 the American people saved Wall Street. Now it's Wall Street's turn. It has to help the middle and working class in our country, ”Sanders said.
Jake Moore had already entered the electoral roll for his 18th birthday last year. He plans to take part in the Democratic primary. "Warren or Sanders, both are good," he says. "Maybe I'll even get out of college debt-free."
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