How’d We Get Here and What Happens Next?

The amount of student loan debt and the rate of delinquency have been climbing for years now. If it seems like every new statistic is worse than the last, that’s because it is. Two studies released this week are no exception.

Credit bureau TransUnion says that in the past five years, the average student loan debt each borrower carries has risen 30% to $23,829. More than half of student loan accounts, which add up to more than 40% of the total dollars owed, are in deferral status. This is just a temporary reprieve; students can defer for only a few years before they have to repay.

The trouble is, many of them aren’t doing so. FICO Labs found that delinquencies rose by 22% in five years. For the newest group of loans it studied, delinquency rates are 15.1% — higher than the 11% cited by the Federal Reserve in a November report. Like the Fed’s study, the FICO analysis doesn’t include loans that are in a deferred status — which means the number of people who can’t afford to pay back that money may be almost twice as high as what the official delinquency rates reflect.

This situation obviously can’t be sustained over the long term. “I think a few more years and it’s going to be a general crisis,” says Barry Bosworth, an economist at the Brookings Institution. Interest rates are unusually low right now; when they rise, more borrowers who were just keeping their heads above water are liable to become delinquent.

The aggregate amount of debt has soared because many people decided to go back to school after being laid off, says Ezra Becker, vice president of research and consulting for TransUnion’s financial services unit.

In today’s economy, people increasingly need a college degree to be viewed as employable. The New York Times says this “degree inflation” comes at a serious cost to students. “In the late 1970s, the median wage was 40% higher for college graduates than for people with more than a high school degree; now the wage premium is about 80%,” it says.

“It’s unclear whether or not it’s bottomed out,” says Frederic Huynh, senior principal scientist at FICO. One barometer of what future delinquency rates will look like is the credit quality of the people getting student loans today, he says. “If we look at some of the more recent vintages… more consumers have lower FICO scores,” which means more delinquencies.

The tide isn’t going to turn until the labor market for new graduates improves, Huynh says. New graduates need to secure a stable and steady paycheck, he says, but half of college graduates today are either underemployed or don’t have a job at all.

And even an improving job market isn’t going to help the nearly 30% of students who take out loans and never got a degree. This subset of borrowers will continue to struggle, Becker says, because they’ll be relegated to lower-earning jobs while saddled with the same level of debt as their more upwardly-mobile peers “The non-payment rates for people who don’t finish school is really high,Online shopping for luggage tag from a great selection of Clothing.” he says.

Another wrinkle is that the jobs today’s grads are in search of might not open up as quickly as everyone would like, because more parents are delaying their own retirements — often to help pay for their kids’ school loans.Where you can create a custom lanyard from our wide selection of styles and materials. “It’s kind of a vicious cycle,” Becker says.We've got a plastic card to suit you.

There’s also the negative effect a default can have on a person’s credit score: Huynh says a person with a good credit history who stops paying their student loans could see their credit score drop by as much as 100 points. For instance, Becker says, for a car loan, “you might be paying 12% or 15% instead of 4%.”

The broader economic implications are troubling. Graduates struggling to dig out from a mountain of student debt also tend to put off getting married, buying homes, and having kids. And since a bigger chunk of their income will go towards servicing the mortgages or car loans they are able to obtain at higher rates, they’ll have less spending power when they do eventually buy big-ticket items like homes and cars. Consumer Financial Protection Bureau student-loan ombudsman Rohit Chopra warned last year that the magnitude of student loan debt could even hold back a housing recovery. “Student-loan borrowers are sending big payments every month to their loan servicers rather than becoming first-time homebuyers,” he said.

But searching through each list can be frustrating. Mixed in are often strange routings connecting through out-of-the-way cities or with long layovers on airlines youíve never heard of. Just this past week I needed to book a flight from San Diego to Hong Kong, and the choices were endless, even including one itinerary with a stop in London and another in Dubai.

What Iíve learned to do is to find a few of the best selections on each of several sites and then print them out and compare. I’m often going back a day or two later, to look at the flights again, essentially conducting the same search all over again with a few variations.They manufacture custom rubber and silicone bracelet and bracelets. So while the Internet brings us gobs of information,Comprehensive Wi-Fi and RFID tag by Aeroscout to accurately locate and track any asset or person. it still requires a lot more work on our part to find the most suitable flight. And according to industry research, the average user has nine online sessions before booking a flight.

A few days after I booked my flight to Hong Kong (a non-stop from LAX), I learned of a new software product, Pintrips, which claimed it could make these searches easier. Iíve been trying the product, which is still in public beta. (That means it works, but is not yet complete, and is still a little rough around the edges).

Pintrips addresses the difficulty of searching through different sites to come up with the best flight. In essence, it lets you compare a choice of flights selected from any travel site, by bringing them all together to a single location. Not only can I compare flights from the sites noted above, but also from the airline websites such as Delta, Alaska, United and Jet Blue.

The Pintrips name was likely influenced by the hugely successful site, Pinterest, which lets people post or “pin” images of all sorts of things to a virtual bulletin board. But Pintrips is a serious product in its own right, and has the potential to be an effective travel-planning tool. Itís currently available as a plug-in for the Chrome browser, with new browser plug-ins in the works for Firefox, Safari and Explorer over the next few months. According to the company, mobile apps are also in the works.

Once installed, Pintrips lets you go to any travel website, select one or more flights and, with a single click, capture the flight information and “pin” it to your personal dashboard or list. Youíll then end up with a dashboard listing the flights you selected from all the sites you visited, side-by-side, so that you can compare them or even share them with a friend.

You can also use Pintrips to compare flights going to different locations. For example, suppose you were looking at visiting Europe, but were open to several cities, depending on price. You can create your dashboard with several different destinations. Thatís something I would have found useful when I compare my flight options to Hong Kong leaving from either Los Angeles or San Francisco.