9 Surprising Facts About Student Debt

iStock
iStock

Americans’ accumulated student debt has topped $1.4 trillion, an all-time high. While that debt came in the service of providing valuable education, it can be a formidable hurdle for individual workers to overcome as they transition from student life into their careers. Check out nine surprising facts about the past, present, and future of the academic loan industry.

1. SCHOOL WASN’T ALWAYS SO EXPENSIVE.

After World War II ended with an Allied victory, the U.S. government rewarded those who served with scholarships under the GI Bill. Millions of veterans got a free education, while millions more who didn’t serve could attend for extremely low tuition rates that could be covered by working a summer job. This kind of nearly unrestricted access continued for decades until the economy took a downturn in the 1970s. As oil embargoes and inflation led to a sharp increase in tuition, private lenders started to take the place of federal aid, and the debt boom began.

2. DEBT HAS SURGED 58 PERCENT IN THE PAST 10 YEARS.

It’s easy to blame inflation for the ballooning student debt balances of the past decade. Graduates in 2005 owed an average of $17,233, while those exiting school in 2012 owed an average of $27,253. But average debts in the auto and credit card industries have fallen in the same period. The difference? Economists believe students have become more likely to take on higher loan amounts in the belief they’ll be able to secure higher-paying jobs after graduation. Unfortunately, those jobs can fail to materialize, leading to growing amounts of debt.

3. …BUT MOST DEFAULTS ARE ON LOANS LESS THAN $10,000.

Economists say that it’s a misconception that enlarged debt amounts are responsible for many of the defaults. By some estimates, two-thirds of delinquent loans are for $10,000 or less. Surprisingly, totals of less than $5,000 make it eight times more likely a student will default than if they owed a greater amount. One possible explanation: These smaller debts belong to low-income employees who didn’t finish school. For workers in lower income brackets, these smaller debts can still be significant obstacles.

4. YOU CAN LOSE YOUR DRIVER’S LICENSE FOR NON-PAYMENT.

What could a student loan default have to do with your driver’s license? In some states, a lot. Residents of Montana and Iowa reported to have non-payment of loans can see their licenses revoked. Other states, like Tennessee, can also suspend professional licenses. In 2010, 42 nurses had to stop working when their loans became past due.

5. DELINQUENT? YOUR WAGES CAN BE GARNISHED.

It’s a vicious cycle for graduates trying to climb the career ladder. If an entry-level job isn’t paying enough to cover student debt, the lender—often backed by federal government protection—can garnish already thin wages in an attempt to recoup their money.

6. DEBT CAN AFFECT YOUR LOVE LIFE.

One prominent economist has tracked survey data that examined the correlation between student debt and lifestyle choices like marriage. For every $10,000 owed, the likelihood of getting married within seven years of graduation fell by 3 to 4 percent.

7. SOME EMPLOYERS WILL HELP EASE YOUR DEBT BURDEN.

Given the prevalence (and amount) of student debt today, some companies hoping to attract top talent are including loan repayment in their benefits packages. Before you sign up for the assistance, know that there will likely be a cap on how much you’re entitled to annually. Another factor to consider: The money your employer puts toward your student loan is counted as taxable income, which means the benefit could end up being a burden once tax time rolls around.

8. YOUR STUDENT LOAN INTEREST PAYMENTS MAY BE TAX DEDUCTIBLE.

If you make less than $80,000—or $160,000, if you’re filing jointly with a spouse—you can claim any interest payments you make on your student loans as a deduction. (According to the IRS’s website, you can claim this deduction even if you don’t itemize everything you’re claiming.) By claiming your interest payments, you may be able to decrease your amount of taxable income by up to $2500.

9. THE GOVERNMENT MAY OFFER SOME SUPPORT TOO.

In an attempt to help recent graduates avoid default, the federal government offers programs aimed at reducing monthly loan payments. One, known as the IBR (income-based repayment) program, will ensure payments comprise no more than 15 percent of an individual’s income. (It will also forgive any balances that exist after 25 years.) Surprisingly, only 14 percent of people with federal student loans take part in this and other programs. If you’re struggling with your payments every month, don’t despair: See if you qualify for an income-based repayment plan.

Kodak’s New Cameras Don't Just Take Photos—They Also Print Them

Your Instagram account wishes it had this clout.
Your Instagram account wishes it had this clout.
Kodak

Snapping a photo and immediately sharing it on social media is definitely convenient, but there’s still something so satisfying about having the printed photo—like you’re actually holding the memory in your hands. Kodak’s new STEP cameras now offer the best of both worlds.

As its name implies, the Kodak STEP Instant Print Digital Camera, available for $70 on Amazon, lets you take a picture and print it out on that very same device. Not only do you get to skip the irksome process of uploading photos to your computer and printing them on your bulky, non-portable printer (or worse yet, having to wait for your local pharmacy to print them for you), but you never need to bother with ink cartridges or toner, either. The Kodak STEP comes with special 2-inch-by-3-inch printing paper inlaid with color crystals that bring your image to life. There’s also an adhesive layer on the back, so you can easily stick your photos to laptop covers, scrapbooks, or whatever else could use a little adornment.

There's a 10-second self-timer, so you don't have to ask strangers to take your group photos.Kodak

For those of you who want to give your photos some added flair, you might like the Kodak STEP Touch, available for $130 from Amazon. It’s similar to the regular Kodak STEP, but the LCD touch screen allows you to edit your photos before you print them; you can also shoot short videos and even share your content straight to social media.

If you want to print photos from your smartphone gallery, there's the Kodak STEP Instant Mobile Photo Printer. This portable $80 printer connects to any iOS or Android device with Bluetooth capabilities and can print whatever photos you send to it.

The Kodak STEP Instant Mobile Photo Printer connects to an app that allows you to add filters and other effects to your photos. Kodak

All three Kodak STEP devices come with some of that magical printer paper, but you can order additional refills, too—a 20-sheet set costs $8 on Amazon.

This article contains affiliate links to products selected by our editors. Mental Floss may receive a commission for purchases made through these links.

Living Near a Trader Joe's Can Increase the Value of Your Home—Here's Why

Trader Joe's can signal that local real estate values are high.
Trader Joe's can signal that local real estate values are high.
Joe Raedle/Getty Images

As real estate experts will tell you, the location of a residential property carries a lot of weight when it comes to its value. Proximity to schools, parks, and other homes selling for their market value are all positives. Apparently, so is having a Trader Joe’s nearby.

According to Reader’s Digest, the popular grocery chain—which is owned by discount grocery giant ALDI—can have an effect on property values. The data was compiled by ATTOM Data Solutions and looked at home sales from 2014 to 2019 across nearly 2000 zip codes. Homes that were near Trader Joe’s, Whole Foods, or ALDI were examined. Overall, homes that were situated close to a Trader Joe’s sold for an average of $608,305, more than those near a Whole Foods and almost three times as much as a home near an ALDI. The average return on investment (ROI) for a home near Trader Joe’s was 51 percent, or 14 percent more than the national average of 37 percent. The Joe’s-adjacent homes also held an average 37 percent equity, compared to 25 percent nationally.

You can view the complete infographic here:

Grocery store chains can be used to measure real estate values. ATTOM Data Solutions

For real estate investors, ALDI actually edged out other grocery chains, with homes near one of their locations seeing a 62 percent average gross flipping ROI and a 42 percent return on appreciation over five years.

Homebuyers may question whether the presence of a supermarket can influence home values, or whether it’s simply a matter of Trader Joe’s choosing locations in affluent neighborhoods with rising property values and deeming them a good prospect for the chain’s expansion. Either way, the store appears to be a signpost that you stand a good chance of profiting from your property.

[h/t Reader’s Digest]