According to a recent look at college affordability by the U.S. Department of Education, it was discovered that the average tuition at a public four year university climbed 15% between 2008 and 2010. Total costs for a private 4 year school can now exceed 200,000. This number just proves what most of us already know- the cost of education is becoming more and more of a burden on students and their families.
When the cost of college exceeds what a family can afford, where do they turn for help? You guessed it, college loans. Now, there are many different varieties of student loans, and not all student loan debt is unhealthy- but the numbers are simply staggering. Another report released by the Department of Education in July estimated outstanding student loan debt at more than a trillion dollars in 2011. Senator Tom Harkin recently released the results of a two-year investigation of for-profit colleges. In the report there was one statistic showing how many households now owe over $50,000 in student loans. Over three million households in the United States now owe at least $50,000 in student loans.
Now, like I said, not all student loan debt is unhealthy, but with default rates at an all-time high, this debt is becoming a real problem. Of the 3.6 million borrowers who began repaying loans in 2009, 8.8% defaulted within just two years. And because of a change in 1998 to federal law, student loans can rarely be discharged through bankruptcy.
Defaulting on a student loan can have serious and unforeseen consequences- even many years after default. Recently there was a story of a 58 year-old teacher who had defaulted on $3,100 she borrowed more than 30 years ago who was targeted by the government with steep wage garnishments to pay off the debt. A recent Wall Street Journal article outlined how more retirees are falling behind on student loans and having their Social Security checks garnished because of it. Believe it or not, the government cut the Social Security checks of roughly 115,000 retirees to recapture defaulted student loans
Student loans are often necessary and make education much more affordable for many Americans. It sounds simple, but before signing the dotted line- think it through. Put payments in perspective. Is it worth the cost? Will I be able to afford this? If the answer is no, consider other options.
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Mark joined WHAM in January of 1998 when his weekly call in financial show "Money and More" first aired. The show ran for eleven years and became one of the stations highest rated programs. Recently Mark has returned to provide daily commentary and analysis on the WHAM afternoon news. His segment can be heard at 4:26pm Monday through Friday, with an extended appearance with Randy Gorbman on Thursdays.
Mark started his financial services career in 1986 with IDS/American Express. He is a Certified Fund Specialist and Certified Long Term Care Specialist with a Bachelor's Degree in Economics and Management from SUNY Geneseo. He has designed, authored, and presented retirement and long term care workshops for clients, corporations, and non-profit organizations such as Xerox, Kodak, Agway, and the United Way.
In 2007, Registered Rep magazine listed Mark among the Top 100 Independent Advisors in the country. He lives in Geneseo with his wife Susan and has four children. Mark is an avid fisherman and enjoys spending time at his family cottage in the Thousand Islands. Mark also collects Civil War and Underground Railroad memorabilia for a museum he keeps in the basement of the historic Henrietta office.
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As professionals skilled in retirement planning, the partners of The Horizon Group have helped hundreds of people in the Rochester area since our founding in 1993. We specialize in helping clients invest and protect their retirement assets with a straightforward and down-to-earth approach through open and honest communication.
We are proud of being able to help clients make difficult decisions necessary for a successful retirement. We are dedicated to the highest level of professionalism and ethical standards in our practice, and we honor the individual circumstances facing each client.
When faced with providing income and security for a lifetime, retirees are comforted by our "Bucket Approach" and half-century of combined experience. Our formalized review process and frequent communication through newsletters, e-mail, and seminars provide our clients with peace of mind and keeps them focused on what is truly important.
Working with The Horizon Group affords our clients a level of service and unbiased advice that can be delivered only by a small independent practice. At the same time, our client accounts are offered the same FINRA and SIPC protections through our broker-dealer, Cadaret, Grant & Co., Inc., as they would be at a large brokerage house.
We take the time to understand all the questions and concerns our clients have about the future. Aiding them in dealing with these concerns often means going above and beyond the duties of the average financial planner, something we are always willing to do. Helping a child, buying a second home, or dealing with long term care are all issues we assist clients with regularly. At The Horizon Group, we know it's about the quality of your life, not just your portfolio.
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The views expressed in Mark's commentaries are to be considered for informational and entertainment purposes only. Before making decisions based on any content in Mark's commentaries you should always consult your financial or tax professional.
The views expressed herein do not necessarily reflect those of this station or of Clear Channel Communications, Inc.
Mark Congdon is a registered representative of Cadaret, Grant & Co., Inc., Member FINRA/SIPC.
