A Correlation Between College Grads and Bankruptcy
There is generally a correlation between your education level and your income. Since 2009, the annual income before taxes in households headed by people with at least a college degree has exceeded that of less-educated households by 101%, up from 91% in 2006.
As of April, the unemployment rate among college graduates stood at 4.5%, compared to 9.7% for those with only a high-school diploma and 14.6% for those who never finished high school. So is there a correlation between college graduation and filing bankruptcy?
University students are actually among the fastest growing group of bankruptcy filers in the United States. Teens are getting credit cards at younger ages and many don’t know how to handle the responsibility. College students rely on credit cards to pay their bills during college. Many don’t work full-time jobs and have little savings when they finish school. The average college student has about $4000 in credit card debt after graduation and has $18,000 in student loans. The average student debt of 2011 graduating college students is $22,900, which is 8% more than last year (in inflation-adjusted terms) and 47% more than a decade ago.
Other statistics indicate that 19% of debtors who are now filing for bankruptcy are college students. Add college graduates to the statistics and the number of college graduates who are filing for bankruptcy increases to 55%. What does this mean? Most bankruptcy filers are slightly better educated than the general population.
So should you get a college degree? The average college graduate makes 101% more than individuals who do not attend college. The average salary across the United States for the working sector is around $40,000. So, 101% more than that is about $40,000 for the average college graduate. That $40,000 more per year, even after taxes, should cover the cost of attending college which is on average approximately $22,900 per year.
So why do college graduates file for bankruptcy if they can afford their college debts? Not all college graduates get a job right away, and when they do, the starting jobs may not pay much more than what the average worker is making. It takes time and experience for your college degree to work for you.
A college degree guarantees nothing except an opportunity to compete, and it may give you a competitive edge against your peers who do not have a degree. Having a college degree also doesn’t guarantee that you will work for a good company, that you can manage your money, or that some unexpected event like an illness won’t prevent you from working. Anything can happen, even to college graduates.
Bankruptcy laws can be complicated, and you might need legal assistance from a bankruptcy lawyer. If you need relief from the stress of debt and you live in or around the metropolitan area of New York City, New York, contact us at www.BankruptcyHome.com . We will help you find a bankruptcy attorney in your area who can answer your bankruptcy questions.
