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I suspect that a large part of that has to do with student loans, which have grown by a huge multiple since 1996. With compounding interest it takes longer to r

I suspect that a large part of that has to do with student loans, which have grown by a huge multiple since 1996. With compounding interest it takes longer to recover from school. I know I graduated with $75k loans at 8% interest. Even with say, a $100k salary, just the interest eats ~7% of the income. With the total payments being somewhere around 12% of your income. Combine that with increased taxes over the same time and a 34% reduction in worth seems about right (if we account for the loss in compounding interest from buying a home, 401k investments, etc)

kartan 7y ago
> I suspect that a large part of that has to do with student loans I think that this is not just a USA issue but it is also happening in all Occident. Student loans are just one of the reasons. But, it is bigger than that. e.g. UK: https://www.ft.com/content/81343d9e-187b-11e8-9e9c-25c814761640 https://www.ft.com/content/81343d9e-187b-11e8-9e9c-25c814761...
- akerro 7y ago
  Can't compare UK here, education is free in Scotland, £9k/annually in Wales (Welsh government can provide 67% grant every year, so it goes down to £3.3k), in England it's the most expensive, over £9k/ann and Student Loan Company has highest interest rates there.
  - isostatic 7y ago
    Those loans don’t need to be repaid, they’re a graduate tax - 9% above £25k for 30 years. Most people won’t earn enough to pay a penny off the tuition - only the cost of living loans. Only the highest paid graduates actually pay tuition
    - akerro 7y ago
      That's not correct! If at any point in your life you make more than £25k they will add this tax on you, and your interested on the student loan is still growing, even when you're under £25k.
      - DanBC 7y ago
        You're charged interest only from the day of your first repayment. https://media.slc.co.uk/repayment/qsg/how-much-do-i-repay.html https://media.slc.co.uk/repayment/qsg/how-much-do-i-repay.ht...
- aries1980 7y ago
  > In fact, this chart understates how badly things have gone for millennials, because it shows incomes before housing costs. No, it does not, because the chart is weighted with CPI, which contains the housing cost. According to that chart, the millenials have the best living standards, but I seriously question the quality of the source, where the young adults take-home salary is above £15K, UK-wide.
momokoko 7y ago
Consumer loans with compounding interest should be illegal. The human brain is incapable of conceptualizing it and it results in inescapable debt once a person starts to fall behind on payments.
- tracker1 7y ago
  I wouldn't say all consumer loans, but probably student loans... given that they are prevented from bankruptcy dismissal.
  - Falkon1313 7y ago
    Also they specifically target people who've never had to deal with such things in practice, and lock them into a multi-year commitment (another thing they've never had to deal with) that they can never get out of while all of society tells them that if they don't do it they'll be a failure. Even if you understand the abstract math as a teen, it's a bit much to expect someone to make an informed choice about the reality of resolving it over years which they have no experience with, and in a job market that they have no experience with. It's a high-pressure predatory system with long-lasting consequences that targets the vulnerable.
- madengr 7y ago
  Maybe only for those who are bad at math.
- leetcrew 7y ago
  > The human brain is incapable of conceptualizing it speak for yourself. I understand geometric growth quite well.
- bdcravens 7y ago
  I don't think the human brain is incapable. We just don't teach it. Perhaps it should be a required course to obtain such a loan?
sysbin 7y ago
Could also be that young people have very little representation when it comes to laws, policies and regulations.
- onlyrealcuzzo 7y ago
  As in their taxes have been in increased to keep unsustainable pension programs humming along?
- dev_dull 7y ago
  The counter argument to this is that their representation is arguably higher now than any other time in history, so more representation (falsely) equates to less wealth by your supposition.
- Alex3917 7y ago
  Millennials are the largest voting block in the US. They have more representation than any other demographic.
  - sjg007 7y ago
    They just need to actually vote..
    - lbotos 7y ago
      According to Pew, They did: https://www.pewresearch.org/fact-tank/2017/07/31/gen-zers-millennials-and-gen-xers-outvoted-boomers-and-older-generations-in-2016-election/ https://www.pewresearch.org/fact-tank/2017/07/31/gen-zers-mi...
      - sjg007 7y ago
        Right, but not in the same proportion as the other groups.
    - tamaharbor 7y ago
      “If voting made any difference, they wouldn’t let us do it.”
aries1980 7y ago
> only 20 percent of consumers were meaningfully better off in 2017 than they were in 2007, with precious little income left to spend on discretionary retail Reading this I assume it is rather caused by housing and food cost in metropolitan areas.
- dmix 7y ago
  Every city job I’ve seen outside of the minimum wage service jobs pay better than all the surrounding small cities and towns. Which helps offset costs. But certainly many urban areas have been very slow to match the right level and type of housing development for the needs of a growing population. The effects of building laws, zoning, political influence, rent control (particularly how it was done in 70s/80s), etc has a long recorded negative pressure on supply vs demand. So it’s very likely the wage differences aren’t sufficient for most people.
  - aries1980 7y ago
    Above a given paygrade, yes, it offsets, but for most people, especially people working for public services, a fiver per hour more won't offset the extra thousands per month. Note: one of my former landlord said he bought the property in the '70s we lived in for £25K, when he worked as delivery postman for £500/month. With living on his own in London, he bought the property after 6 years working for Royal Mail. Today, the median RML postman salary https://www.payscale.com/research/UK/Job=Postman/Salary https://www.payscale.com/research/UK/Job=Postman/Salary is £18K (take-home pay is £1315/m), a 1-bedroom flat rental in the outskirts according to Numbeo (https://www.numbeo.com/cost-of-living/in/London https://www.numbeo.com/cost-of-living/in/London) is £1215, without the utilities and council tax (which was £92/mo for me) The remaining £100 is enough for nothing. But even if let's say share the flat with an SO and split the costs, it is unlikely you can ever afford a 1-bedroom flat. The same for my parents' case in Hungary ('90s). My mom was a PA, my dad a factory worker. They were able to buy a flat when they were 20, a year after my sister born. My wife parents (factory workers) bought a small house in a village when they were 19. Both family needed no financial aid from their parents. Both properties had an interest-free mortgage around the 30% of the property value. I wouldn't compare that era with the current one , because neither my landlord, nor our parents could afford holidays abroad or a car. But neither had to worry about where will you sleep or whether your family can afford fresh, quality food if you have to find an other job.
deleted 7y ago
[deleted]
dev_dull 7y ago
Couple this along with the fact that millennials are largely choosing to live in cities which have seen the most dramatic cost of living/rent inflation.
- lotsofpulp 7y ago
  Which is the economically optimal choice considering the increased volatility in labor markets.
- ryanSrich 7y ago
  Not sure it’s a true choice. It’s either live in the city and earn a 6 figure salary or literally go jobless. Small towns and cities don’t have jobs. If they did we’d see less people living in cities.
  - dev_dull 7y ago
    I think they do have jobs, just not jobs suited for the typical degrees/training that millennials are obtaining.
  - bdcravens 7y ago
    Yes but not all cities are equivalent. I can sling code in Houston the same as in San Francisco or New York. While someone always calls out the extremes (as if everyone in SF is a $400k engineer), in general the economics work out in my favor in a cheaper city.
  - lazyjones 7y ago
    > Small towns and cities don’t have jobs. The unemployment rate in the USA is at 3,6%. Small towns and cities would be deserted if they had no jobs.
  - burfog 7y ago
    They sure do have jobs, but you can't land in a random small city and expect to find a specific pair of specialist jobs. Small cities work great for single-income families that aren't picky about which particular city they end up in. Non-specialist second income is fine too. Example: There are lots of small cities with openings for librarians, and lots of cities with openings for CNC programmers. It is far more difficult to find a small city with both, so insisting on that sort of two-income situation in a small city isn't going to go well. The same goes for nearly any kind of skilled employment. The jobs are there, but you can't throw a dart at a map of America and expect to find two very specific job openings in one spot. This may be one factor driving the urban-rural political split. Single-income families are different from two-income families.
philwelch 7y ago
Especially if your measurement is net worth. A new college graduate today isn't just broke, she's personally insolvent and will be for the next few years.
88840-8855 7y ago
I have read the new wealth of nations by Surjit Bhalla recently. He describes this phenomenon and also includes the reasons of educational and international mobility. Education has been as accessible as never before in the last decades. Further, emancipation (rated "good" by the author") has contributed to more women studying and entering the white color workforce. And globalisation has contributed towards people moving globally to where the jobs are. This has lead to an oversupply of highly qualified people and the stagnation of real wages worldwide. Exceptions are developing countries where demand is still higher and yet is leading towards increasing wages.
badpun 7y ago
The 8% interest on the loans seems high to me. Around here (Poland), a standard credit card is at 10% interest, and student loans should be much safer for the bank.
- tehlike 7y ago
  In the us, credit card interest is around 25% or more.
  - deleted 7y ago
    [deleted]
- joehandzik 7y ago
  It's true. I may have actually been higher for some loans until I got a couple of promotions and had enough of an income increase to be able to refinance to a 5 year 4.75% loan at SoFi. Which itself still feels high as you watch DAILY interest compounding happen. I lean fairly liberal, but I think we can make significant strides with this issue in the US by simply changing what max interest rates are and how this interest compounds. The way things work right now truly feels like robbery when you're in the thick of it.
  - burfog 7y ago
    We could limit max interest rates. If that had been in place, your loan would have been denied. Would that have been better for you? Might you have then chosen to get an illegal loan at an even higher interest rate from organized crime, with a risk of violence for non-payment?
- tdfx 7y ago
  Just checked my direct federal loans (the first source of loan funding for most US college students -- the second is private banks). Interest rate is 4.41%. I was lucky because federal direct loans covered my tuition, but many other students need to take private loans, as well.
  - 7y ago
deleted 7y ago
[deleted]
bsanr2 7y ago
This is certainly a factor, but I think HN's main demographic tends to overestimate the effect of college-related issues on the fortunes of the general population, where college graduates are still a minority. I imagine that the most important factor is the lowered rate of home-ownership.
- dd36 7y ago
  Due to what?
- godelski 7y ago
  [0]: 2017: 33.4% of Americans (25+) have a Bachelors or higher 2007: 28% of Americans have a Bachelors or higher 1940: 4.6% of Americans had a 4+ year education (post high school) You're right, college graduates are still a minority, but there is definitely a largely increasing. There's definitely more people enrolling than that. 70% of Americans will enroll in a 4 year degree but <2/3 of them will get a degree and 56% will drop out by year 6.Also Full-time students are 55% less likely to drop out of college than students who go to school exclusively part-time.[1] So while college graduates are still a minority, it doesn't look like Americans who enroll in college are. They are clearly in the majority, and just because they don't graduate doesn't mean they haven't gathered debt. [0] https://thehill.com/homenews/state-watch/326995-census-more-americans-have-college-degrees-than-ever-before https://thehill.com/homenews/state-watch/326995-census-more-... [1] https://www.collegeatlas.org/college-dropout.html https://www.collegeatlas.org/college-dropout.html
  - rayiner 7y ago
    Even if they don’t have debt, while they’re enrolled in college they’re not building net worth.
  - brandonmenc 7y ago
    > just because they don't graduate doesn't mean they haven't gathered debt ...and end up even worse off - they have the debt, but not the degree that could get them the higher paying job.
  - 7y ago
godelski 7y ago
I just did some quick math[0]. At that 75k loan, 8% interest, and 100k salary, if you pay 10% of your salary it takes you 11.5 years to pay off (and you pay almost 40k in interest >50% of principal). Same numbers, but a 100k loan that goes to 20.25 years to pay off and you pay >100k in interest. Though to be fair, if we put in the average student loan ($29800) and the average US household income (60309) we bring it down to 6.33 years and ~8k in interest (28% of principal). But it is unlikely that many college graduates are making the median household income as a fresh graduate. If we go to 40k/yr salary then it jumps to 11.5 years and 15k in interest (53%). This also doesn't take into account that most of these loans are variable interest rates. Considering that, these numbers would put us on the lower side (of someone starting with an 8% interest rate). Edit: spelling [0] https://www.bankrate.com/loans/student-loans/how-long-to-pay-off-student-loan/ https://www.bankrate.com/loans/student-loans/how-long-to-pay...
- MagicPropmaker 7y ago
  What do you mean by “50% of principle”?
  - skookum 7y ago
    The OP simply misspelled 'principal'. By ">50% of principal" they meant that the interest paid over the life of the loan is more than 50% of the original loan amount.
  - deleted 7y ago
    [deleted]
adatavizguy 7y ago
I've had three careers the latest writing software earning 6 figures without having gone to school.
burfog 7y ago
The college dropouts, and the people with truly useless majors, have a real problem. For you, there is an obvious path forward. The 40th percentile household income is $50k. Live on that. You can thus put the extra $50k toward the loan, paying it off in less than 2 years.
- SomeOldThrow 7y ago
  > The 40th percentile household income is $50k. This mostly depends on where you live.
IkmoIkmo 7y ago
Not just that, but educational attainment in general, demographic changes, economic changes etc. We've shifted from a population that does not die old, starts working early, stops education early, and does most of its work in the primary/secondary (agri/manufacturing) economy where its most productive when young. To automating those jobs and shifting to a world where we grow old, stay in school longer, have high returns on education in our tertiary service-based economic productivity levels, which gets us to be most productive in middle age, which also coincides with most of our investments in personal housing equity, retirement funds and paying down debt. Not a huge surprise that if you take a few age cohorts, that a young one will drop in wealth, while an older one will grow in wealth. Our society lives and works longer, and prepares longer for this work in school, which has more individual-benefits and thus higher individual educational debts at a young age. As such, I wouldn't be surprised if the wealth-hump didn't just move over a few years. Losing 1/3rd wealth within a certain age cohort (18-35) would be no surprise if half the wealth of 18-35 year olds was generated at 32-35, and this shifted to 35-38. I'd be most interested in seeing a graphical wealth distribution by age, for different generations, then you'd know if this was a story of decline, or a story of shifting the 'prime productivity' age by a few years. That having been said, my post was mostly on a 100-year historic scale. Things haven't changed quite as much since 1996, but I think it's still mostly linked to the same forces.
mnky9800n 7y ago
I don't want to think about all the money lost in paying student loans that could have been put into investments instead. It's a travesty.

kartan 7y ago

> I suspect that a large part of that has to do with student loans I think that this is not just a USA issue but it is also happening in all Occident. Student loans are just one of the reasons. But, it is bigger than that. e.g. UK: https://www.ft.com/content/81343d9e-187b-11e8-9e9c-25c814761640 https://www.ft.com/content/81343d9e-187b-11e8-9e9c-25c814761...

akerro 7y ago
Can't compare UK here, education is free in Scotland, £9k/annually in Wales (Welsh government can provide 67% grant every year, so it goes down to £3.3k), in England it's the most expensive, over £9k/ann and Student Loan Company has highest interest rates there.
- isostatic 7y ago
  Those loans don’t need to be repaid, they’re a graduate tax - 9% above £25k for 30 years. Most people won’t earn enough to pay a penny off the tuition - only the cost of living loans. Only the highest paid graduates actually pay tuition
  - akerro 7y ago
    That's not correct! If at any point in your life you make more than £25k they will add this tax on you, and your interested on the student loan is still growing, even when you're under £25k.
    - DanBC 7y ago
      You're charged interest only from the day of your first repayment. https://media.slc.co.uk/repayment/qsg/how-much-do-i-repay.html https://media.slc.co.uk/repayment/qsg/how-much-do-i-repay.ht...
aries1980 7y ago
> In fact, this chart understates how badly things have gone for millennials, because it shows incomes before housing costs. No, it does not, because the chart is weighted with CPI, which contains the housing cost. According to that chart, the millenials have the best living standards, but I seriously question the quality of the source, where the young adults take-home salary is above £15K, UK-wide.

momokoko 7y ago

Consumer loans with compounding interest should be illegal. The human brain is incapable of conceptualizing it and it results in inescapable debt once a person starts to fall behind on payments.

tracker1 7y ago
I wouldn't say all consumer loans, but probably student loans... given that they are prevented from bankruptcy dismissal.
- Falkon1313 7y ago
  Also they specifically target people who've never had to deal with such things in practice, and lock them into a multi-year commitment (another thing they've never had to deal with) that they can never get out of while all of society tells them that if they don't do it they'll be a failure. Even if you understand the abstract math as a teen, it's a bit much to expect someone to make an informed choice about the reality of resolving it over years which they have no experience with, and in a job market that they have no experience with. It's a high-pressure predatory system with long-lasting consequences that targets the vulnerable.
madengr 7y ago
Maybe only for those who are bad at math.
leetcrew 7y ago
> The human brain is incapable of conceptualizing it speak for yourself. I understand geometric growth quite well.
bdcravens 7y ago
I don't think the human brain is incapable. We just don't teach it. Perhaps it should be a required course to obtain such a loan?

sysbin 7y ago

Could also be that young people have very little representation when it comes to laws, policies and regulations.

onlyrealcuzzo 7y ago
As in their taxes have been in increased to keep unsustainable pension programs humming along?
dev_dull 7y ago
The counter argument to this is that their representation is arguably higher now than any other time in history, so more representation (falsely) equates to less wealth by your supposition.
Alex3917 7y ago
Millennials are the largest voting block in the US. They have more representation than any other demographic.
- sjg007 7y ago
  They just need to actually vote..
  - lbotos 7y ago
    According to Pew, They did: https://www.pewresearch.org/fact-tank/2017/07/31/gen-zers-millennials-and-gen-xers-outvoted-boomers-and-older-generations-in-2016-election/ https://www.pewresearch.org/fact-tank/2017/07/31/gen-zers-mi...
    - sjg007 7y ago
      Right, but not in the same proportion as the other groups.
  - tamaharbor 7y ago
    “If voting made any difference, they wouldn’t let us do it.”

aries1980 7y ago

> only 20 percent of consumers were meaningfully better off in 2017 than they were in 2007, with precious little income left to spend on discretionary retail Reading this I assume it is rather caused by housing and food cost in metropolitan areas.

dmix 7y ago
Every city job I’ve seen outside of the minimum wage service jobs pay better than all the surrounding small cities and towns. Which helps offset costs. But certainly many urban areas have been very slow to match the right level and type of housing development for the needs of a growing population. The effects of building laws, zoning, political influence, rent control (particularly how it was done in 70s/80s), etc has a long recorded negative pressure on supply vs demand. So it’s very likely the wage differences aren’t sufficient for most people.
- aries1980 7y ago
  Above a given paygrade, yes, it offsets, but for most people, especially people working for public services, a fiver per hour more won't offset the extra thousands per month. Note: one of my former landlord said he bought the property in the '70s we lived in for £25K, when he worked as delivery postman for £500/month. With living on his own in London, he bought the property after 6 years working for Royal Mail. Today, the median RML postman salary https://www.payscale.com/research/UK/Job=Postman/Salary https://www.payscale.com/research/UK/Job=Postman/Salary is £18K (take-home pay is £1315/m), a 1-bedroom flat rental in the outskirts according to Numbeo (https://www.numbeo.com/cost-of-living/in/London https://www.numbeo.com/cost-of-living/in/London) is £1215, without the utilities and council tax (which was £92/mo for me) The remaining £100 is enough for nothing. But even if let's say share the flat with an SO and split the costs, it is unlikely you can ever afford a 1-bedroom flat. The same for my parents' case in Hungary ('90s). My mom was a PA, my dad a factory worker. They were able to buy a flat when they were 20, a year after my sister born. My wife parents (factory workers) bought a small house in a village when they were 19. Both family needed no financial aid from their parents. Both properties had an interest-free mortgage around the 30% of the property value. I wouldn't compare that era with the current one , because neither my landlord, nor our parents could afford holidays abroad or a car. But neither had to worry about where will you sleep or whether your family can afford fresh, quality food if you have to find an other job.

deleted 7y ago

[deleted]

dev_dull 7y ago

Couple this along with the fact that millennials are largely choosing to live in cities which have seen the most dramatic cost of living/rent inflation.

lotsofpulp 7y ago
Which is the economically optimal choice considering the increased volatility in labor markets.
ryanSrich 7y ago
Not sure it’s a true choice. It’s either live in the city and earn a 6 figure salary or literally go jobless. Small towns and cities don’t have jobs. If they did we’d see less people living in cities.
- dev_dull 7y ago
  I think they do have jobs, just not jobs suited for the typical degrees/training that millennials are obtaining.
- bdcravens 7y ago
  Yes but not all cities are equivalent. I can sling code in Houston the same as in San Francisco or New York. While someone always calls out the extremes (as if everyone in SF is a $400k engineer), in general the economics work out in my favor in a cheaper city.
- lazyjones 7y ago
  > Small towns and cities don’t have jobs. The unemployment rate in the USA is at 3,6%. Small towns and cities would be deserted if they had no jobs.
- burfog 7y ago
  They sure do have jobs, but you can't land in a random small city and expect to find a specific pair of specialist jobs. Small cities work great for single-income families that aren't picky about which particular city they end up in. Non-specialist second income is fine too. Example: There are lots of small cities with openings for librarians, and lots of cities with openings for CNC programmers. It is far more difficult to find a small city with both, so insisting on that sort of two-income situation in a small city isn't going to go well. The same goes for nearly any kind of skilled employment. The jobs are there, but you can't throw a dart at a map of America and expect to find two very specific job openings in one spot. This may be one factor driving the urban-rural political split. Single-income families are different from two-income families.

philwelch 7y ago

Especially if your measurement is net worth. A new college graduate today isn't just broke, she's personally insolvent and will be for the next few years.

88840-8855 7y ago

I have read the new wealth of nations by Surjit Bhalla recently. He describes this phenomenon and also includes the reasons of educational and international mobility. Education has been as accessible as never before in the last decades. Further, emancipation (rated "good" by the author") has contributed to more women studying and entering the white color workforce. And globalisation has contributed towards people moving globally to where the jobs are. This has lead to an oversupply of highly qualified people and the stagnation of real wages worldwide. Exceptions are developing countries where demand is still higher and yet is leading towards increasing wages.

badpun 7y ago

The 8% interest on the loans seems high to me. Around here (Poland), a standard credit card is at 10% interest, and student loans should be much safer for the bank.

tehlike 7y ago
In the us, credit card interest is around 25% or more.
- deleted 7y ago
  [deleted]
joehandzik 7y ago
It's true. I may have actually been higher for some loans until I got a couple of promotions and had enough of an income increase to be able to refinance to a 5 year 4.75% loan at SoFi. Which itself still feels high as you watch DAILY interest compounding happen. I lean fairly liberal, but I think we can make significant strides with this issue in the US by simply changing what max interest rates are and how this interest compounds. The way things work right now truly feels like robbery when you're in the thick of it.
- burfog 7y ago
  We could limit max interest rates. If that had been in place, your loan would have been denied. Would that have been better for you? Might you have then chosen to get an illegal loan at an even higher interest rate from organized crime, with a risk of violence for non-payment?
tdfx 7y ago
Just checked my direct federal loans (the first source of loan funding for most US college students -- the second is private banks). Interest rate is 4.41%. I was lucky because federal direct loans covered my tuition, but many other students need to take private loans, as well.
- 7y ago

deleted 7y ago

[deleted]

bsanr2 7y ago

This is certainly a factor, but I think HN's main demographic tends to overestimate the effect of college-related issues on the fortunes of the general population, where college graduates are still a minority. I imagine that the most important factor is the lowered rate of home-ownership.

dd36 7y ago
Due to what?
godelski 7y ago
[0]: 2017: 33.4% of Americans (25+) have a Bachelors or higher 2007: 28% of Americans have a Bachelors or higher 1940: 4.6% of Americans had a 4+ year education (post high school) You're right, college graduates are still a minority, but there is definitely a largely increasing. There's definitely more people enrolling than that. 70% of Americans will enroll in a 4 year degree but <2/3 of them will get a degree and 56% will drop out by year 6.Also Full-time students are 55% less likely to drop out of college than students who go to school exclusively part-time.[1] So while college graduates are still a minority, it doesn't look like Americans who enroll in college are. They are clearly in the majority, and just because they don't graduate doesn't mean they haven't gathered debt. [0] https://thehill.com/homenews/state-watch/326995-census-more-americans-have-college-degrees-than-ever-before https://thehill.com/homenews/state-watch/326995-census-more-... [1] https://www.collegeatlas.org/college-dropout.html https://www.collegeatlas.org/college-dropout.html
- rayiner 7y ago
  Even if they don’t have debt, while they’re enrolled in college they’re not building net worth.
- brandonmenc 7y ago
  > just because they don't graduate doesn't mean they haven't gathered debt ...and end up even worse off - they have the debt, but not the degree that could get them the higher paying job.
- 7y ago

godelski 7y ago

I just did some quick math[0]. At that 75k loan, 8% interest, and 100k salary, if you pay 10% of your salary it takes you 11.5 years to pay off (and you pay almost 40k in interest >50% of principal). Same numbers, but a 100k loan that goes to 20.25 years to pay off and you pay >100k in interest. Though to be fair, if we put in the average student loan ($29800) and the average US household income (60309) we bring it down to 6.33 years and ~8k in interest (28% of principal). But it is unlikely that many college graduates are making the median household income as a fresh graduate. If we go to 40k/yr salary then it jumps to 11.5 years and 15k in interest (53%). This also doesn't take into account that most of these loans are variable interest rates. Considering that, these numbers would put us on the lower side (of someone starting with an 8% interest rate). Edit: spelling [0] https://www.bankrate.com/loans/student-loans/how-long-to-pay-off-student-loan/ https://www.bankrate.com/loans/student-loans/how-long-to-pay...

MagicPropmaker 7y ago
What do you mean by “50% of principle”?
- skookum 7y ago
  The OP simply misspelled 'principal'. By ">50% of principal" they meant that the interest paid over the life of the loan is more than 50% of the original loan amount.
- deleted 7y ago
  [deleted]

adatavizguy 7y ago

I've had three careers the latest writing software earning 6 figures without having gone to school.

burfog 7y ago

The college dropouts, and the people with truly useless majors, have a real problem. For you, there is an obvious path forward. The 40th percentile household income is $50k. Live on that. You can thus put the extra $50k toward the loan, paying it off in less than 2 years.

SomeOldThrow 7y ago
> The 40th percentile household income is $50k. This mostly depends on where you live.

IkmoIkmo 7y ago

Not just that, but educational attainment in general, demographic changes, economic changes etc. We've shifted from a population that does not die old, starts working early, stops education early, and does most of its work in the primary/secondary (agri/manufacturing) economy where its most productive when young. To automating those jobs and shifting to a world where we grow old, stay in school longer, have high returns on education in our tertiary service-based economic productivity levels, which gets us to be most productive in middle age, which also coincides with most of our investments in personal housing equity, retirement funds and paying down debt. Not a huge surprise that if you take a few age cohorts, that a young one will drop in wealth, while an older one will grow in wealth. Our society lives and works longer, and prepares longer for this work in school, which has more individual-benefits and thus higher individual educational debts at a young age. As such, I wouldn't be surprised if the wealth-hump didn't just move over a few years. Losing 1/3rd wealth within a certain age cohort (18-35) would be no surprise if half the wealth of 18-35 year olds was generated at 32-35, and this shifted to 35-38. I'd be most interested in seeing a graphical wealth distribution by age, for different generations, then you'd know if this was a story of decline, or a story of shifting the 'prime productivity' age by a few years. That having been said, my post was mostly on a 100-year historic scale. Things haven't changed quite as much since 1996, but I think it's still mostly linked to the same forces.

mnky9800n 7y ago

I don't want to think about all the money lost in paying student loans that could have been put into investments instead. It's a travesty.