We New Englanders love our summers. We tend to take in the sunshine and put off those burning issues until after Labor Day. For the fun of it, I thought I would look back this summer and see what took place in terms of our collective treatment of money matters and see if we’re making any progress in understanding them. Here’s a snapshot of what I found:
- 73 percent of Americans who are in school or have school-aged children said their back-to-school budgets were either the same as last year’s or smaller, according to a Chase Slate — U.S. News Monitor survey in August. How’s that economic recovery going?
- Total household credit has contracted for seven straight quarters. Mortgage debt is down $462 billion from the peak, which it reached in November 2008. Bank-card borrowings, which peaked two months later, are off $126 billion. Auto loans have fallen $122 billion; home-equity lines, $77 billion. It’s great that debt levels are falling – can our economy adjust to a new spending culture?
- Home and car sales are plummeting again. Job growth has shrunk to a sliver. Personal bankruptcies are soaring. To use a well-worn line, “it’s about jobs stupid.”
- Under proposed regulations, announced July 23, for-profit colleges and universities would qualify for federal student aid only if enough former students were repaying their student loans, or if graduates generally earned enough to repay their debts. Can’t wait to see the metric calculation for this – bet it’s not ready until 2015.
- Thanks to provisions in the CARD Act, banks must now offer overdraft protection to consumers on an opt-in basis, meaning that you won’t get this “service” unless you specifically sign up for it. Have YOU read the information from your financial institution?
- We have a new watchdog – the Bureau of Consumer Financial Protection. This new agency will have the power to regulate a wide range of financial products and services, including credit counseling, payday loans, mortgages, credit cards and other bank products. And it won't be easy for other agencies to override the bureau's regulations. Additionally, the bureau will be charged with financially educating consumers. Oh really? Trouble is, by the time they get going and actually DO something, we’ll be smack in the middle of another presidential election.
- American colleges are spending a declining share of their budgets on instruction and more on administration and recreational facilities for students, according to a study of college costs this summer by the Delta Cost Project. I have no words for this...
- Tuition, on average, increased more rapidly over the decade at public institutions than it did at private ones. Average tuition rose 45 percent at public research universities and 36 percent at community colleges from 1998 to 2008, compared with about 21 percent at private research universities. Those darn pesky state budgets...
- U.S. Department of Education – now makes 100 percent of student loans as of July 1. Time will tell, but I predict this year’s college freshman are going to be pretty upset upon graduation when they are given 4 different coupon books to repay their student loans.
- An average of 9.1 percent of college graduates were unemployed in 2009, up from 5.5 percent in 2005 and 4.4 percent in 2000, according to the Department of Labor's Bureau of Labor Statistics. For those with some college experience but without a degree, that figure averaged 14.1 percent last year, compared to 21.5 percent of high school graduates with no time on a higher education campus. And you thought taking math is school was pretty lame…)
- Americans now owe more in student loan debt than they do for all credit card debt, according to a recent report published by the financial aid information website FinAid.org. And no frequent flier miles either…
So it seems to me that we need financial education more than ever, Guess it’s time to get back to work and get back to the mission.
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