Two-thirds of Americans don’t understand how credit cards work: The debt addiction in your pocket.
There is something alluring about swiping a card and making a purchase. It almost seems euphoric and fun. Credit cards come in a variety of sleek designs to help you part with your current and future income. Americans are deeply in debt. Mortgages, student loans, auto debt, and credit cards consume a large portion of future income. You would think that most people would reflect on the mechanics of how debt works but this is not the case. Most people are oblivious to how credit cards work but continue to use them and go into deep debt. Throw in online shopping and you can store your credit information virtually and shop with one-click. This wouldn’t be such a problem if incomes were moving ahead. Unfortunately that is not the case and many are struggling to find their economic balance in the new low wage economy. Credit card debt is once again on the rise and two-thirds of Americans do not understand how credit cards work.
Student debt now makes up nearly half of federally owned financial assets. The student debt bubble edges on with many more unable to pay their debt.
The student debt epidemic is spiraling out of control and the public is becoming more aware of the situation. $1.3 trillion in student debt is now outstanding. This is already a problem with nearly one out of three loans in repayment already in some form of delinquency. Clearly if you are not paying back an obligation there is some sort of underlying problem. But like most of the epic debt bubbles, people are slowly coming to the realization that most of this debt will never be paid back. Consider it a forever loan. The problem with this mentality is that student loans are now becoming a giant part of federal assets. In fact student debt now makes up nearly half of federally owned financial assets. Again, I remind you that nearly one out of three loans in repayment is in some form of delinquency.
1 out of 4 college adjunct faculty collecting government assistance: Students in debt and professors barely getting by all the while tuition soars.
The student debt crisis continues to move across the nation’s landscape like an unrelenting storm. The stories of economic pain are growing involving students but what about adjunct professors? For those of you that are unfamiliar, adjunct professors are like contract teachers at many colleges. Many carry a heavy teaching load but receive very little job security. At many for-profits, more money is spent on marketing than actual instruction which begs the question as to where the money is flowing. It certainly isn’t on career services to help students given the abysmal results. Adjunct faculty as it turns out, are now part of the new low wage America. A recent study found that a whopping 25% of college adjunct faculty are receiving some form of government assistance. This isn’t someone working a part-time job making pizza. No, these are people teaching your young college kids economics and science.
The new American retirement plan equates to working forever: Nonexistent nest eggs and most Americans are bad at planning as to how long they will live.
The idea of retirement is a modern one especially when it comes to saving and having a nest egg. In the past, retirement was only a luxury afforded to a small number of wealthy families. The rest of the population was destined to work until they died. That may seem harsh but that is historical fact. After World War II the idea of mass retirement started to take hold. Even Social Security was merely a safety net to keep you from starving or being homeless. Social Security was never designed as the main source of income for retirees but that is what it has become. Many older Americans simply did not prepare adequately. The taking away of pension plans was supposed to usher in the era of the self-directed 401k. One generation later the results are in and Americans are looking into the new retirement plan. The new retirement plan is working forever (in other words, until people can no longer physically hold down a job). This certainly doesn’t coincide with the brochures we see of older Americans galloping across the beach with cocktails in their hands.