To put this into simple language. Stan finishes four years at a out-of-state college. He owes $96k on his loan. The best he can do after graduation is a $34k job, which he accepts and in five years....he’s pulling in $40k.
Stan is limited on expenses because of what he pays each month. He can’t afford more than a week of vacation at some 2-star hotel near Myrtle Beach, SC. He has a gal that he’d like to marry (at age 28) but between the two of them...they both $138k on college loans.
They marry in a quiet and small ceremony...taking a honeymoon to a nice two-star hotel for a week. No purchasing of a house in their plans for the next ten years, because they owe so much. Their preference for cars? $15k Honda cars.
Somewhere around age 35, they agree that they can have kids now because their student loans are down to $60k. They would still be living in an apartment but Stan’s parents have passed on and left him their ‘old’ house.
Around age 44, Stan and his wife have finally paid off their student loans. They have virtually nothing in a 401k, and the house really needs renovation...so they pour their money into that. Around age 49, they finally can afford to start a 401k .
By age 65, Stan and his wife have around $100k in their 401k. It’s not much, for two people who have degrees, but they owed so much on the student loans. They retire on social security and $400 a month from the 401k they have. Life is fairly miserable but they have a good education to appreciate.
By 2030, a quarter of the nation would fall into Stan’s category. I don’t see much for the housing market, the investment market, electronic sales, tourism, or the banking sector. Other than the educational sector and the loan sector....everything else in America is stalled.
Is there anything wrong with this picture?
I think you have hit the nail on the head.
I am Stan. Except I went back to school last year for an MBA. At $52000.