This week, the Federal Reserve released its fifth annual report on our “economic well-being”: how well Americans handle money and get by.
It’s full of interesting stats and is one of the most authoritative looks at how we’re actually doing after a year under Donald Trump’s leadership. (As opposed to his tweets, or the anecdotes of people not doing so well.) But major media blew reporting on it.
CNN and some of the other biggest names went for the most boring stat, one Debt.com has reported many variations of from smaller surveyors: “40% of Americans can’t cover a $400 emergency expense.” (NPR at least focused on something new the Fed did, looking at the economic impact of the opioid crisis.)
That’s an important stat, and it’s an improvement from the 44 percent who said they couldn’t last year. I don’t credit Trump for it. It’s been steadily improving for years — when the Fed started the survey in 2013, half of Americans were in that boat.
But there are more specific problems tackled in the study that are worth diving into. Especially when it comes to college, where Trump’s people have made things worse, if anything.
People still want education they can’t afford
The Fed report looked at the benefits of higher education and found two-thirds of Americans who went to college say that they outweighed the costs. That sentiment is more common among older Americans, though — who both paid less for school and have had more time for the education to pay off.
Most want more education because they know it’s worth it, despite the rising costs and long-term debt. About a third of Americans have a bachelor’s degree, but 70 percent have enrolled in something beyond high school. People with the bachelor’s degree are most likely to say their finances improved in the past year.
Three-quarters of people without a college degree say they would have liked to complete more education.
Not just any kind of school is worth it, though. People who went into a vocational or technical program were least likely to say the benefits outweighed the cost, while those in engineering were most likely. A majority of people in humanities and social sciences, despite the widespread scoffing, also say it was worth the money.
“Financial considerations, including tuition being too expensive or a need to earn money, are the most common reasons,” people don’t go or finish college, says the Fed, “collectively affecting two-thirds of those who did not attend college and nearly three-fifths who did not complete their degree.”
Student loans are often a bad, and worsening, fix
The “solution,” for many, is often going deeper into student loan debt to achieve a degree. But Americans are struggling with those more than ever, despite an economy that’s been improving since the study started: “20 percent were behind on their payments in 2017. This rate is up slightly from 19 percent in 2016 and 18 percent in 2015.”
The Fed says 42 percent of college attendees went into debt for it, and half of those still are. The typical monthly payment is between $200 and $300.
And some of the most interesting data here for me was about for-profit schools, since Education Secretary Betsy DeVos seems to be a big fan.
People who attended for-profit schools are most likely to regret their education, the Fed found. Not only are they dissatisfied with the results, they’re often worse off:
“Individuals who did not complete their degree or who attended a for-profit institution are more likely to struggle with repayment than those who took on large amounts of debt but completed a degree from a public or not-for-profit institution. Nearly one-fourth of borrowers who attended for-profit institutions are behind on student loan payments, versus 9 percent who attended public
institutions and 6 percent who attended nonprofit institutions.”
In other words, the Education Department has a lot of work to do — and still no interest in doing it.
I’m not looking forward to the 2019 Fed report.
Article last modified on May 24, 2018. Published by Debt.com, LLC . Mobile users may also access the AMP Version: How Americans’ Finances Are Better — and Worse — Under Trump - AMP.
Article last modified on May 24, 2018. Published by Debt.com, LLC .