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New Demos Report and New Findings From NY Federal Reserve Cast Light On Student Debt Crisis
NEW YORK - March 6 - Yesterday the Federal Reserve Bank of New York released grim findings about the student debt crisis across the nation. According to the these findings, the total outstanding student loan balance now stands at about $870 billion, and as many as 47 percent of student loan borrowers appear to be in deferral or forbearance periods as of third-quarter 2011. The national policy center Demos and youth advocacy organization Young Invincibles have co-authored a new report on “The State of Young America” that uses a new national poll, databytes and extensive analysis to shed light on the many issues plaguing future generations, including the debt-for-diploma system.
According to “The State of Young America,” the Great Recession has intensified the impact of thirty years of negative economic trends across young Americans' lives, spiking personal debt rates while reducing government assistance: Today, 25-34 year olds devote on average 25% of their income to debt payments, up from only 18% in 1989. The report details the reality for young Americans today, the first generation on pace to be worse off than their parents.
<p "=""><em><a href="http://www.demos.org/state-of-young-america" _cke_saved_href="http://www.demos.org/state-of-young-america">READ THE FULL REPORT AND EXPLORE THE DATABYTES HERE</a></em></p> <p class="p1">"The State of Young America" also includes policy recommendations from Demos – including a Contract for College and a plan for strengthening America’s community colleges – as well as first-hand accounts of struggling young Americans that illuminate the stories behind the troubling data findings.</p> <p>This project includes results from an exclusive national poll of young people, conducted by Lake Research Partners and Bellwether Research & Consulting, revealing that:</p> <ul> <li class="p1">48% of 25-34 year olds and 28% of 18-24 year olds owe at least $5,000 in debt, with no less than 42% of all 18-34 year olds reporting that student loans are responsible for their level of indebtedness increasing over the last 4 years. </li> <li class="p2">88% of all 18-34 year olds support increasing financial aid and making loans more affordable for college and post-high school education and training.</li> </ul> <p class="p1">Key Facts from the “State of Young America” Report:</p> <ul> <li class="p2">From 2007 to 2009, student loan default rates increased by nearly one-third: in 2009, 15% of graduates from for-profit colleges were in default.</li> <li class="p2">The cost of college tuition has increased over 300% since 1980; at the same time, the maximum coverage of the cost of attending college covered by Pell Grants has shrunk from 69% in 1980 to 34% today.</li> <li class="p2">The percent of young adults 18-34 who were uninsured in 2009 is more than twice as high as the share of older adults without insurance. Half of all Hispanic young people have no health insurance.</li> </ul> <p>"Even before the Great Recession, this generation faced a mountain of obstacles on the path to economic security," said <a href="http://www.demos.org/expert/tamara-draut" _cke_saved_href="http://www.demos.org/expert/tamara-draut">Tamara Draut</a>, Vice President of Policy and Programs at Demos and author of the book, <u><a href="http://www.demos.org/news/strapped-why-americas-20-and-30-somethings-cant-get-ahead" _cke_saved_href="http://www.demos.org/news/strapped-why-americas-20-and-30-somethings-cant-get-ahead">Strapped: Why America's 20- and 30-Somethings Can't Get Ahead</a></u>. "After thirty years of misguided policies, from disinvestment in education to destabilizing tax cuts, today's generation of young people are coming of age in a political and economic system that is no longer providing pathways into the middle class. It used to be that hard work and education were the pathways to the middle class, but today's 'debt-for-diploma' system and the lack of good jobs seriously undercuts this generation's ability to recreate the prosperity and mobility that their baby boomer parents experienced."</p> <p>Tamara Draut is available for comment. The infographics are available for republication (with attribution).</p><p></p>