Could fear of looming debt discourage choosing college?

Do you still think your education was worth it?

In an overall gloomy report from Moody’s Analytics, it’s become painfully clear that students who borrow for college will find themselves faced with more debt than ever before. The report says that while the default rate on mortgages, auto loans and credit cards has improved, it has only gotten worse for student loans. That could be because student loan origination standards were not tightened in the way they were for other types of consumer loans during the recession:

Part of this may be because the federal government ensured that lenders had funds to lend to students throughout the recession. With no supply constraints and a federal guarantee taking losses in the event of a default, lenders had little need to curtail their lending and every incentive to expand it. This permitted borrowing to remain robust at the cost of poorer performance.

Students in the northeast part of the country, brace yourselves. The report says you have an average of $8,337 to $12,701 in student loan debt in comparison to students in other parts of the country who waiver between $5,390 to $8,337. The cost of education has shot through the roof over the last decade, more than doubling since 2000, according to the report.

While more people may be choosing to go to college because they see it as an investment that will help them get a better job, it also means more of the future workforce will find itself with looming debt. The job market is still bleak, even for people with those diplomas. Eventually, that could end up discouraging students from certain higher education options, leading to a more uneducated workforce:

 Fewer people may pursue higher education should the returns fall and the required debt burdens continue to rise. The implications for the macroeconomy of a decline in higher education enrollment are twofold. In the short run, weaker demand for educational services would be a drag on consumption, at a time when the economy continues to suffer from a shortfall in aggregate demand. Longer term, a less educated work- force would necessarily be less productive, putting the U.S. at a disadvantage relative to other countries.

The report concludes by saying, “Unless students limit their debt burdens, choose fields of study that are in demand, and successfully complete their degrees on time, they will find themselves in worse financial positions and unable to earn the projected income that justified taking out their loans in the first place.”

You might want to be sure you can do that before taking on the responsibility (and debt) of college.



News
Entertainment
Sports
Lifestyle
Local

Mayor de Blasio raises minimum wage for some…

Mayor Bill de Blasio signed an executive order Tuesday morning that will raise the minimum wage for workers employed by private companies that receive more…

National

3 myths about the working poor

Linda Tirado works to debunk some common stereotypes about the working poor in her new book, "Hand to Mouth."

Money

Lawsuit funding advances: friend or foe?

Reporter was commissioned to write this in-depth article Many plaintiffs awaiting resolution of their lawsuit or legal claim often find themselves in a tricky financial…

National

Accused Boston bomber’s sister faces judge over bomb…

The sister of the alleged Boston Marathon bomber faced a judge in New York Tuesday on charges that she told her husband's ex-girlfriend she could "put a bomb where you…

Music

See the most popular Pandora station in your…

Who knew Bachata music was so popular?

The Word

The Word: Twilight just won't die

You thought our "Twilight" days were behind us, didn't you? Well think again. Series creator Stephenie Meyer (who would rather you not ask about "Twilight"…

Going Out

Which NYC restaurant lost its three-star Michelin rating?

A record 73 restaurants in New York City collected coveted Michelin stars on Tuesday as a mix of trendy spots and fine-dining stalwarts underscored the…

Entertainment

Interview: Metro chats with filmmaker Meir Kalmanson, man…

A New York filmmaker hands out smiles to its residents.

NFL

Fantasy football: Ben Tate to break out, Larry…

Fantasy football: Ben Tate to break out, Larry Donnell will stay solid

NFL

Source: Drafting Geno Smith was '100 percent' John…

It might have been a “Jets decision” as general manager John Idzik likes to say, but it wasn't a unanimous decision to draft Geno Smith last year.

MLB

Mets 2014 report card

The Mets wrapped up their eight straight season without a playoff appearance last weekend. Needless to say, they fell a bit short of general manager…

NFL

NFL Power Rankings: Cowboys, Packers, Ravens, Chargers climb

NFL Power Rankings: Cowboys, Packers, Ravens, Chargers climb

Style

Balmain: Paris Fashion Week

Our review of the Balmain Spring '15 show at Paris Fashion Week.

Style

Givenchy: Paris Fashion Week

Our review of the Givenchy Spring ' 15 show at Paris Fashion Week.

Style

Chanel: Paris Fashion Week Spring 2015

Our review of the Chanel Spring '15 fashion show.

Style

Louis Vuitton: Paris Fashion Week 2015

Our review of the Louis Vuitton show at Paris Fashion Week.