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Thread: NYT - Student Debt and marriages, families, housing recovery

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    Banned Melonie's Avatar
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    Default NYT - Student Debt and marriages, families, housing recovery

    from


    (snip)"How Student Debt Wrecks Marriages, Inhibits Family Formation, and Delays the Housing Recovery

    The New York Times had an interesting article last week on how student debt is affecting family formations. Please consider How Debt Can Destroy a Budding Relationship


    Nobody likes unpleasant surprises, but when Allison Brooke Eastman’s fiancé found out four months ago just how high her student loan debt was, he had a particularly strong reaction: he broke off the engagement within three days.

    Ms. Eastman said she had told him early on in their relationship that she had over $100,000 of debt. But as the couple got closer to their wedding day, she took out all the paperwork and it became clear that her total debt was actually about $170,000. “He accused me of lying,” said Ms. Eastman, 31, a San Francisco X-ray technician and part-time photographer who had run up much of the balance studying for a bachelor’s degree in photography. “But if I was lying, I was lying to myself, not to him. I didn’t really want to know the full amount.”

    Ms. Tidwell, 26, is involved in a serious relationship with Stefan Kogler, an architect who is a native of Austria and living in Vienna. To Europeans, who often pay little or nothing toward their university studies, the idea of going deeply into debt to get educated is, well, foreign.

    Ms. Tidwell feels no guilt about the $250,000 in debt she will probably run up, including some from a master’s degree program she completed in London, where she and Mr. Kogler met. “I didn’t acquire it because I go out and shop a lot,” she said. “It’s because I’m doing something that I’ll love for the rest of my life.”


    Still, if she and Mr. Kogler are going to move in together and get engaged, she wants their financial arrangements to be clear and fair. But how do you define fair when you’re bringing a quarter of a million dollars in debt to a relationship?

    All of this raises the question: At what point do you have a moral obligation to disclose your indebtedness during courtship? On the eighth date? When you get to third base? In your eHarmony online dating profile?

    Ms. Eastman in San Francisco says she knows that now. “What would I have done differently, besides bringing a copy of my credit report on the first date?” she said, with a rueful chuckle. “I would have been more responsible.”


    Family Formation a Serious Macro Issue

    Such stories may make for pretty humorous reading, but this is a serious macro issue. Housing typically leads the economy out of recession. If couples put off marriage, or never get engaged in the first place, that obviously hinders family formation.

    In turn, that hinders the demand for houses and related goods and services, not to mention the goods and services required to have kids.

    Moreover, student debt contributes to the problem of unloading a massive inventory of homes and a massive shadow inventory of homes on top of that. Many students are so deep in debt and without a job that not only have they delayed marriage, they have moved back home and are not even renting apartments.

    Banks sitting on foreclosures thinking that a housing recovery is around the corner, have another thing coming. These structural problems, including boomers headed into retirement wanting to downsize their homes (with no one to sell to), puts additional pressure on home prices."(snip)


    The author makes a very interesting point. What happens when you marry someone who carries a huge amount of 'non-dischargeable' student loan debt ... which you potentially become equally responsible to repay the minute the marriage is performed ?

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    God/dess Deogol's Avatar
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    Default Re: NYT - Student Debt and marriages, families, housing recovery

    I never share bank accounts and if she wants to get super serious there is a credit report run. I hate to be a dick about money but it is pretty damn important as a resource for fixing things, doing things, and getting things in this country.

    And let me rant here a little bit (as I would never rant on stripperweb!)...

    There is an important point about college being nearly free in Europe compared to the US. We have a huge "tax" around our throats for all the talk the current politician goes on about the importance of education in our society.

    It is becoming more and more obvious to me, that while Europe may have more taxes (questionable) - it certainly is spent more wisely than it is in the US.

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    Banned Melonie's Avatar
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    Default Re: NYT - Student Debt and marriages, families, housing recovery

    ^^^ which will probably lead to using 'prenup' agreements regarding debt responsibility in a manner similar to the way 'prenups' are now used for asset segregation. Unfortunately, various state laws which cover individual spouse sole ownership of pre-existing marital 'assets' don't necessarily work reciprocally for individual spouse sole responsibility for pre-existing marital 'debts'. Same holds true for individual spouse credit ratings.


    As to your comments about US tax rates approaching EU tax rates, but with US taxpayers getting less 'bang for their buck' where education is concerned, consider the following ...

    (snip)"France has 82 universities, teaching 1.5m students [ out of ~63 million French population - sic]. All are public; none charges tuition fees; undergraduate enrolment charges are a tiny €165. All lecturers are civil servants. Universities cannot select students, who can apply only to ones near them. The results speak for themselves. Not a single French university makes it into the world's top 40 universities.

    In France, there is no difference in tuition fees between European and Non-European students. Therefore, policies officially search to improve the quality of the foreign students they receive, making a selection based on excellence and discipline of study. They intend to avoid a "mass phenomenon" of unwanted students in French universities who are not highly motivated and who mainly seek to obtain a visa and to stay in France."(snip)

    from

    The arguable point re France of course is that, in a manner similar to socialized medicine, a low cost of tuition ( but large cost of gov't subsidy ) also translates into the 'rationing' of a limited number of French college admission openings. This in turn translates into domestic French college students being selected on the basis of academic achievement ... but which also means that students who might successfully apply to US colleges on some basis other than academic achievement i.e. 'diversity' or 'sports' simply do not get accepted at French colleges. Arguably, while no French colleges are rated in the world's top 40 universities, they do have a consistent level of academic performance which is respected by French industries ... and students who are unable to meet that standard of academic performance flunk out. This is in great contrast to US public colleges where academic standards have been compromised to reduce flunk out rates or achieve 'diversity' goals to the point where US industries now question the relative worth of US public college degrees.

    For perspective, there are 17.5 million US college students out of a 310 million population or 5.65%. For a French population of roughly 63 million, the 1.5 million French college students represents 2.38% . By US standards, the French are 'rationing' college educations ... to the most academically deserving. This policy is a major 'bone of contention' for college age French residents of 'Le Zone' who are usually of French colonial descent i.e. North Africa, Middle East, Caribbean etc. and whose lack of academic achievement effectively denies them access to that 'free' French college education !

    From a purely 'bang for the buck' standpoint, the US could easily adopt the French model ... close 1/2 the public universities and community colleges, redirect the same $$$ of gov't education budget to effectively double gov't subsidy levels to the remaining public universities, and reject college admissions applications from anyone whose academic standards don't 'measure' up ( i.e. abandon 'diversity' and collegiate 'sports' policies which override academic performance criteria). Good luck selling that !!! Also this would mean that an additional ~2.5 million current US college students would have to be acknowledged as being officially unemployed !!!

    ~
    Last edited by Melonie; 09-14-2010 at 04:42 PM.

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    Default Re: NYT - Student Debt and marriages, families, housing recovery

    I can see how student debt can seriously harm a relationship; after all, student debt WILL be paid, even if they take it from you by force. Entering into a commitment with someone carrying a 175,000 debt load honestly wouldn't be something that 'love will overcome' - for me at least. Essp. if that debt was accrued getting a relatively useless degree.

    If he was a doctor, or someone with a very high salary who would be able, and agree too, pay it off quickly then I may consider it. Can you put a debt clause in your pre-nup? "I will not inherit your debt if your lazy ass can't make payments."?

    My boyfriend of 4 years is moving to Canada to live with me once he graduates in December. His total student debt will be about $5000 - not a lot by current debt standards, but it's something we have already discussed in length. He has 6 months before he has to start paying it off, and it will be his responsibility - he will budget his income and make the monthly payments. If we decide to buy a home in the next two years we don't want that debt counting against us. We're planning on signing a co-habitation agreement too, but that's a different topic entirely.

    Anyway, I just wanted to make mention how irresponsible many students are with their loans. They think the money will always be there, and once they graduate they'll be making millions of dollars and pay it off overnight. My old roommate said something like "Once I get my degree in English, I'm applying over at the local library. They pay like - 14 bucks an hour to recent grads!". $14/hour is not enough to live well and pay off $50,000 in loans you've built up in the last 4 years....when you probably could of lived off half that amount if you were smart.

    Anyway, end rant. I find all this stuff you post interesting Melonie, even if I don't always comment/agree.



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    Default Re: NYT - Student Debt and marriages, families, housing recovery

    ^^^ as far as I know, there isn't any major US legal precedent that student loan debt obligations can be segregated to the husband or to the wife but not to both. Similarly, there is no way to totally segregate credit ratings of husband and wife. There IS some legal precedent which segregates loan debt obligations of many kinds if the marriage were to be dissolved which generally follows the IRS 'innocent spouse' doctrine - but again this does not come into play while the marriage is still in place.

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    Default Re: NYT - Student Debt and marriages, families, housing recovery

    Quote Originally Posted by 4everresolutions View Post

    Anyway, I just wanted to make mention how irresponsible many students are with their loans. They think the money will always be there, and once they graduate they'll be making millions of dollars and pay it off overnight. My old roommate said something like "Once I get my degree in English, I'm applying over at the local library. They pay like - 14 bucks an hour to recent grads!". .
    Librarians make more then $14/hr and need more then just an undergrad degree in English. It requires an undergrad degree (english or whatever topic), plus an additional 2 years masters program (MLS-masters of library science). So that's 6 years of school, at least. An undergrad in Canada is going to be around $30,000. The two year MLS program itself is around $20,000. Yes, schooling gets more expensive the higher degree you want to obtain. Undergrad is fairly cheap compared to masters programs, PhDs, and specialized professions (ie law, medicine, teaching, nursing, forensics).

    All that said, the average income for a librarian is around $45,000/ yr. That's pretty modest considering the amount of schooling involved and the cost of the education. Keep in mind it takes about 7 years for law degree (JD) or a degree in medicine (MD). Both law and medicine do require a year (or sometimes more if you get specialized) or so of practicum after the 7 years of school, they are paid for this though. However most librarians are also required to dedicate a year or so of practice after schooling. Of course this is paid.

    However in comparison librarians do earn a very modest salary compared to a doctor or lawyer. And its almost the same amount of schooling!



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    Default Re: NYT - Student Debt and marriages, families, housing recovery

    ^ This was in the states. She got the job too. She's officially a librarian with a 4 year degree in English, making 28,000/year ($14/hr). Good to know they make more in Canada though. It seems to be that jobs pay better in Canada than the states.....

    Also, about education costing more the higher up you go; this is true, but schools in general offer more compensation the higher up you go. Boyfie's going for his PhD here in Canada. Not only is he guaranteed his tuition and books covered, but he's guaranteed to make a minimum of 15,000/year to cover additional expenses through working for the school as a GA and doing research. He's no special case either - 4/5 Universities he applied to offered this. Kinda helps the burn of not making income for an additional 4 years, at least you're not ridden with debt.



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