We've all been told that it will pay to get an education. But perhaps it doesn't pay as well as it once did. The number of individuals with a college diploma filing for bankruptcy has increased in the last five years by twenty percent, according to a new study. The age and income of filers has also increased.
College-educated, higher-income earners
Tues, the Institute for Financial Literacy report was released. It showed, from 2006 to 2010, that there was a rise in the amount of bankruptcies filed by those with graduate degrees from 11.2 percent to 13.6 percent.
There are several people without college degrees filing for bankruptcy still. This is the case for about 70 percent of filers. There was a higher rate of individuals filing that had any degree though. This is compared to years before. Those with just a high school education have a higher chance of filing. These people make up for about a third of all filings done.
The Institute for Financial Literacy creator, Leslie Linfield, 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."
Done from 2006 to 2010
From 2006 to 2010, there were quite a few individuals in courses for cash management or bankruptcy credit counseling. In fact, there were over 50,000 people in these courses. Its purpose was to track bankruptcy statistics following the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act. In order to control those who were able to file bankruptcy, the BAPCPA was signed by President George W. Bush.
All factors considered
"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. Linfield finds them particularly at risk. "At 54," she asked, "do they really have enough time in front of them to start over?"
The study also showed that the number of filers making more than $60,000 leaped by 66 percent.
There was a rise from 2.1 percent to 4.5 percent in Asian Americans, which more than doubled. There was also a rise from 6.5 percent to 8.7 percent in Hispanic filers. A decrease from 15.4 percent in 2006 to 2010's 11.3 percent was shown for African-Americans. This shows a huge decline in numbers.
Over-extended credit and job loss
Linfield blames the massive 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 consumers were job loss, reduction of income and over-extended credit.
There was an increase in the amount of bankruptcies filed in The United States last year. They went up 1.5 million, the New York Daily News reports.
College-educated, higher-income earners
Tues, the Institute for Financial Literacy report was released. It showed, from 2006 to 2010, that there was a rise in the amount of bankruptcies filed by those with graduate degrees from 11.2 percent to 13.6 percent.
There are several people without college degrees filing for bankruptcy still. This is the case for about 70 percent of filers. There was a higher rate of individuals filing that had any degree though. This is compared to years before. Those with just a high school education have a higher chance of filing. These people make up for about a third of all filings done.
The Institute for Financial Literacy creator, Leslie Linfield, 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."
Done from 2006 to 2010
From 2006 to 2010, there were quite a few individuals in courses for cash management or bankruptcy credit counseling. In fact, there were over 50,000 people in these courses. Its purpose was to track bankruptcy statistics following the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act. In order to control those who were able to file bankruptcy, the BAPCPA was signed by President George W. Bush.
All factors considered
"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. Linfield finds them particularly at risk. "At 54," she asked, "do they really have enough time in front of them to start over?"
The study also showed that the number of filers making more than $60,000 leaped by 66 percent.
There was a rise from 2.1 percent to 4.5 percent in Asian Americans, which more than doubled. There was also a rise from 6.5 percent to 8.7 percent in Hispanic filers. A decrease from 15.4 percent in 2006 to 2010's 11.3 percent was shown for African-Americans. This shows a huge decline in numbers.
Over-extended credit and job loss
Linfield blames the massive 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 consumers were job loss, reduction of income and over-extended credit.
There was an increase in the amount of bankruptcies filed in The United States last year. They went up 1.5 million, the New York Daily News reports.
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