9 Surprising Facts About Student Debt

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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.

Swear Off Toilet Paper With This Bidet Toilet Seat That's Easy to Install and Costs Less Than $100

Tushy
Tushy

The recent coronavirus-related toilet paper shortage has put the spotlight on the TP-less alternative that Americans have yet to truly embrace: the bidet.

It's not exactly a secret that toilet paper is wasteful—it's estimated to cost 437 billion gallons of water and 15 million trees to produce our yearly supply of the stuff. But while the numbers are plain to see, bidets still aren't common in the United States.

Well, if price was ever the biggest barrier standing in the way of swearing off toilet paper for good, there's now a cost-effective way to make the switch. Right now, you can get the space-saving Tushy bidet for less than $100. And you'll be able to install it yourself in just 10 minutes.

What is a Bidet?

Before we go any further, let’s just go ahead and get the awkward technical details out of the way. Instead of using toilet paper after going to the bathroom, bidets get you clean by using a stream of concentrated water that comes out of a faucet or nozzle. Traditional bidets look like weird toilets without tanks or lids, and while they’re pretty uncommon in the United States, you’ve definitely seen one if you’ve ever been to Europe or Asia.

That said, bidets aren’t just good for your butt. When you reduce toilet paper usage, you also reduce the amount of chemicals and emissions required to produce it, which is good for the environment. At the same time, you’re also saving money. So this is a huge win-win.

Unfortunately, traditional bidets are not an option for most Americans because they take up a lot of bathroom space and require extra plumbing. That’s where Tushy comes in.

The Tushy Classic Bidet Toilet Seat.

Unlike traditional bidets, the Tushy bidet doesn’t take up any extra space in your bathroom. It’s an attachment for your existing toilet that places an adjustable self-cleaning nozzle at the back of the bowl, just underneath the seat. But it doesn’t require any additional plumbing or electricity. All you have to do is remove the seat from your toilet, connect the Tushy to the clean water supply behind the toilet, and replace the seat on top of the Tushy attachment.

The Tushy has a control panel that lets you adjust the angle and pressure of the water stream for a perfect custom clean. The nozzle lowers when the Tushy is activated and retracts into its housing when not in use, keeping it clean and sanitary.

Like all bidets, the Tushy system takes a little getting used to. But once you get the hang of it, you’ll never want to use toilet paper again. In fact, Tushy is so sure you’ll love their product, they offer customers a 60-day risk-free guarantee. If you don’t love your Tushy, you can send it back for a full refund, minus shipping and handling.

Normally, the Tushy Classic retails for $109, but right now you can get the Tushy Classic for just $89. So if you’ve been thinking about going TP-free, now is definitely the time to do it.

At Mental Floss, we only write about the products we love and want to share with our readers, so all products are chosen independently by our editors. Mental Floss has affiliate relationships with certain retailers and may receive a percentage of any sale made from the links on this page. Prices and availability are accurate as of the time of publication.

The Best Way to Defer Your Credit Card Payments During the Coronavirus Shutdown, Explained

Credit card companies can offer financial assistance, but there can be drawbacks.
Credit card companies can offer financial assistance, but there can be drawbacks.
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A number of financial relief options are available to Americans who have been affected by the unprecedented health situation created by the spread of the coronavirus. Mortgage companies are offering forbearances; insurance companies have lowered premiums for cars that aren’t being driven. Credit card companies have also acknowledged that cardholders may have trouble keeping up with their bills. While many companies are eager to help with debt and interest, there are some things you should know before picking up the phone.

The good news: If you’re unable to make your minimum monthly payment in a given month, major card issuers like Chase, Capital One, and others are willing to grant a forbearance. That means you can skip the minimum due without being hit with a negative strike on your credit report for a missed payment.

A forbearance is no free ride. Interest will still accrue as normal, and the card issuer may consider the missed payment deferred, not waived. If you pay $50 monthly, for example, and are able to skip a May payment, make sure the card won't expect a $100 minimum in June to cover both months. Ask the company to define forbearance so you know what’s expected. Some may be willing to lower your minimum payment instead, which could be a better option for you.

While the skipped payment won’t impact your FICO credit score directly, be aware that it could still have consequences. Because many minimum payments mainly cover interest, your balance won’t remain the same—it will continue to grow. And because that interest is still adding up, your total amount owed is still going up relative to your available credit, which can affect your score.

If you have a sizable amount due, the National Foundation for Credit Counseling (NFCC) recommends looking into alternatives to forbearance, like using savings to pay down some high-interest cards, taking advantage of zero-interest balance transfer offers, or even taking out a personal loan with a lower interest rate.

If you have multiple credit card balances and the prospect of trying to get through to a human to discuss payment options seems daunting, the NFCC is offering their assistance. The agency can put you in touch with a credit counselor who can act on your behalf, obtaining forbearances or other relief from the card companies. Be advised, though, that card issuers may want to get your permission to deal with the counselors directly. The program is free and you can reach the NFCC via their website.

Be mindful that emergency relief is different from a debt management plan, which consolidates debt and can have a negative impact on your credit card accounts.

In many cases, the best thing to do is to pick up the phone and deal with the card issuer directly. Explain your situation and ask about what options they have. Some might waive payments. Others might offer to lower your interest rate. No two card issuers are alike, and it’s in your best interest to take the time to see what’s available.

[h/t lifehacker]