Acquiring a college degree could not be quite the promise to a great paying career that it used to be. The amount of people with a college degree declaring bankruptcy has risen in the last five years by twenty percent, according to a new study. The age and salary of filers has also increased.
Obtaining a graduate degree no longer means you'll have a career
The report, released Tues by the Institute for Financial Literacy, showed that the quantity of bankruptcy filers with a graduate degree climbed from 11.2 percent in 2006 to 13.6 percent last year.
Individuals without a college diploma make up 70 percent of all bankruptcy filers. There was a higher rate of individuals filing that had any diploma though. This is compared to years before. Those with just a high school education have a greater chance of filing. These people make up for about a 3rd of all filings done.
Leslie Linfield is the Institute for Financial Literacy creator. She said:
"There's these mythologies out there that if you go to college and you get a degree, you're going to do financially better. I think this data is starting to erode at this myth. ... The Great Recession has had a dramatic impact on the bankruptcy filings of American consumers across the economic spectrum -- including college-educated, high-income earners."
Huge study
The study was conducted from 2006 to 2010, involving more than 50,000 debtors in bankruptcy credit counseling or money management courses. After the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act, this survey was done to follow bankruptcy statistics. The BAPCPA was an act signed into law by President George W. Bush which attempted to tighten the reins on who could and could not file bankruptcy.
What was being reviewed?
"While less educated, low-income individuals continue to represent the typical bankruptcy filer," Linfield said, "this report underscores a sophisticated evolution of the profile of the American debtor that now extends to disparate age, income and ethnic groups."
In 2006, the filings were all around the same age. They were around 35 and 44. It changed to be between ages 45 and 54 last year. Linfield explained that there is a good risk here. It is very significant to note. "At 54," she asked, "do they really have enough time in front of them to start over?"
About 66 percent of filers made less than $60,000 a year.
Asian Americans, whose numbers more than doubled, climbed from 2.1 percent to 4.5 percent. Hispanic filers, according to the report, increased from 6.5 percent to 8.7 percent. African-Americans had a significant decline in numbers, sinking from 15.4 percent in 2006 to 11.3 percent last year.
What could be blamed for the change?
Linfield blames the large number of white-collar career losses in the banking and other industries for the lion's share of the statistical increases. The reasons cited by customers were career loss, reduction of income and over-extended credit.
Last year, the amount of personal bankruptcies filed in America rose by 1.5 million, as reported by the New York Daily News.
Obtaining a graduate degree no longer means you'll have a career
The report, released Tues by the Institute for Financial Literacy, showed that the quantity of bankruptcy filers with a graduate degree climbed from 11.2 percent in 2006 to 13.6 percent last year.
Individuals without a college diploma make up 70 percent of all bankruptcy filers. There was a higher rate of individuals filing that had any diploma though. This is compared to years before. Those with just a high school education have a greater chance of filing. These people make up for about a 3rd of all filings done.
Leslie Linfield is the Institute for Financial Literacy creator. She said:
"There's these mythologies out there that if you go to college and you get a degree, you're going to do financially better. I think this data is starting to erode at this myth. ... The Great Recession has had a dramatic impact on the bankruptcy filings of American consumers across the economic spectrum -- including college-educated, high-income earners."
Huge study
The study was conducted from 2006 to 2010, involving more than 50,000 debtors in bankruptcy credit counseling or money management courses. After the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act, this survey was done to follow bankruptcy statistics. The BAPCPA was an act signed into law by President George W. Bush which attempted to tighten the reins on who could and could not file bankruptcy.
What was being reviewed?
"While less educated, low-income individuals continue to represent the typical bankruptcy filer," Linfield said, "this report underscores a sophisticated evolution of the profile of the American debtor that now extends to disparate age, income and ethnic groups."
In 2006, the filings were all around the same age. They were around 35 and 44. It changed to be between ages 45 and 54 last year. Linfield explained that there is a good risk here. It is very significant to note. "At 54," she asked, "do they really have enough time in front of them to start over?"
About 66 percent of filers made less than $60,000 a year.
Asian Americans, whose numbers more than doubled, climbed from 2.1 percent to 4.5 percent. Hispanic filers, according to the report, increased from 6.5 percent to 8.7 percent. African-Americans had a significant decline in numbers, sinking from 15.4 percent in 2006 to 11.3 percent last year.
What could be blamed for the change?
Linfield blames the large number of white-collar career losses in the banking and other industries for the lion's share of the statistical increases. The reasons cited by customers were career loss, reduction of income and over-extended credit.
Last year, the amount of personal bankruptcies filed in America rose by 1.5 million, as reported by the New York Daily News.
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