With College Funding coming in at # 2, just behind retirement planning, as the most important Financial Planning topic … we watch the various statistics, public commentary and rules for trends, advanced planning techniques and rule changes that may be positive or negative in the coming years.
The History of Student Loans
The Federal Government began guaranteeing student loans in 1965. Here is our best found article on the complete history.
As a hot topic for any presidential administration, various laws have been passed since 1965, in most cases enhancing the ability for students/parents to obtain loans. Unfortunately, tuition costs have risen at a dramatic rate as well … a possible topic for another time.
Total Student Loan Statistics
The following chart from our friends at the St Louis Fed (FRED) shows the much spoken about total bulging student debt … often times called a crisis… yes, it is a large number and growing, but before you take a stance, we have more for you…
In our minds, student debt is one of the most acceptable debts from a Financial Planning perspective … yes we would prefer NOT to have any, and planning in advance helps this fact, but there are always situations where it is just not possible. Loans for higher education gives many the best opportunity for longevity of happiness in a career they may not otherwise had access…
Parents we would argue not sacrifice retirement for college funding, but we know there are many strong feelings on this topic…
Total Student Debt
Total Burden Per Person By State
This chart from our friends at HowMuch.com started the wheels turning for this article…. and is a per person debt load in each of the 50 states.
An Interesting and Important Statistical Chart
Student Debt is large, and clearly growing, however, much to our surprise, the growth rate of student debt has slowed dramatically in recent years….
This chart is the percentage change year over year in student loans, note the super high mid teens growth during the great recession … not a surprise given the lack of job opportunities at the time.
Happily the growth rate has steadily declined post great recession.
Have a Great “Student Debt Update” Day!
John A. Kvale CFA, CFP
Natural Rate Of Unemployment/Employment ?
Post great recession of 07-09, many including ourselves were not certain just what the rate of Employment or Unemployment the US economy would run at in the future.
Full Employment/Unemployment history
Taking a look at this chart from FRED a research tank at the St Louise Federal Reserve, while it took longer to get back to historical levels, it finally has.
Granted there can be debates on the scope of the current employment rate, but from a high level measure stick such as this, it looks normal.
This longer term fantastic chart from this research report of the San Francisco Federal Reserve, shows the same.
Why did it take so long to normalize?
The great recession was just that, so GREAT, it really put dents in the economy making this one of the slowest recoveries on record.
The weakest recovery line (slowest and lowest in the chart) represents this recovery. (This chart from our friends at JPMorgan.)
The good news about such a slow recovery is that is has also become one of the longest, due to just that fact, slow and gradual, and certainly not overheating!
Have a Great Full Employment Day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com
Share this:
Like this:
Leave a comment
Posted in Economy, Investing/Financial Planning, Market Comments
Tagged Employment, FRED, San Francisco Fed, St Louis Fed, Unemployment, Unemployment Rate