We've all been told that it will pay to get an education. But perhaps it does not pay as well as it once did. The number of individuals with a university diploma filing for bankruptcy has risen in the last 5 years by 20 percent, according to a brand new study. The age and income of filers has also increased.
Increase in graduate diploma bankruptcies
There was an increase from 2006 to 2010 from 11.2 percent to 13.6 percent of those with graduate degrees filing for bankruptcy according to the Institute for Financial Literacy report released Tues.
There are many individuals without college degrees declaring bankruptcy still. This is the lawsuit for about 70 percent of filers. But the study showed that those with associates and bachelor's degrees also filed at a higher rate than in previous years. About a third of the filings are individuals that only have a high school education.
Leslie Linfield, founder of the Institute for Financial Literacy, 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."
More than 50,000 surveyed
There were more than 50,000 debtors in courses for bankruptcy credit counseling or money management from 2006 to 2010. Bankruptcy statistics were being followed. This was to see the effect of the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act. President Bush signed the BAPCPA. This was done so those who were filing bankruptcy could be controlled just a little bit better.
Age, income and racial groups
"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. When 2010 came around, those numbers changed. It was between 45 and 54 at that point. This is an enormous risk, Linfield notes. "At 54," she asked, "do they really have enough time in front of them to start over?"
The individuals made very little money too. In fact, less than $60,000 a year was what 66 percent made.
There was an increase from 2.1 percent to 4.5 percent in Asian Americans, which more than doubled. Hispanic filers, as reported by 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.
Something is to blame
There has been a ton of job loss, which has caused most of the problems to happen, as reported by Linfield. Consumers responding to the study cited over-extended credit, job loss and reduction of income more than any of other reasons as the causes of their financial turmoil.
There was a rise in the amount of bankruptcies filed in America last year. They went up 1.5 million, the New York Daily News reports.
Increase in graduate diploma bankruptcies
There was an increase from 2006 to 2010 from 11.2 percent to 13.6 percent of those with graduate degrees filing for bankruptcy according to the Institute for Financial Literacy report released Tues.
There are many individuals without college degrees declaring bankruptcy still. This is the lawsuit for about 70 percent of filers. But the study showed that those with associates and bachelor's degrees also filed at a higher rate than in previous years. About a third of the filings are individuals that only have a high school education.
Leslie Linfield, founder of the Institute for Financial Literacy, 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."
More than 50,000 surveyed
There were more than 50,000 debtors in courses for bankruptcy credit counseling or money management from 2006 to 2010. Bankruptcy statistics were being followed. This was to see the effect of the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act. President Bush signed the BAPCPA. This was done so those who were filing bankruptcy could be controlled just a little bit better.
Age, income and racial groups
"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. When 2010 came around, those numbers changed. It was between 45 and 54 at that point. This is an enormous risk, Linfield notes. "At 54," she asked, "do they really have enough time in front of them to start over?"
The individuals made very little money too. In fact, less than $60,000 a year was what 66 percent made.
There was an increase from 2.1 percent to 4.5 percent in Asian Americans, which more than doubled. Hispanic filers, as reported by 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.
Something is to blame
There has been a ton of job loss, which has caused most of the problems to happen, as reported by Linfield. Consumers responding to the study cited over-extended credit, job loss and reduction of income more than any of other reasons as the causes of their financial turmoil.
There was a rise in the amount of bankruptcies filed in America last year. They went up 1.5 million, the New York Daily News reports.
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