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March
19
2018

Half of Total US Government Assets Are...Student Loan Receivables?!
Jill Mislinski

Young liberal American, you might not consider yourself a true patriot, but when you take out a six-figure loan from the federal government for that Art History degree from NYU, you are helping to lay the very foundation of the federal balance sheet.

A jaw-dropping 49.8% of all federal assets are student loans. And if you think that over $1 trillion in debt is coming back to the government in full, think again. Over 11% of loans are "seriously delinquent" (over 90 days behind, in the debt industry's "kiss it goodbye" bin).

And this is with interest rates still near zero and a series of rate hikes to come.

Student loans may be a liability on the consumer balance sheet, but they constitute an asset for Uncle Sam. Just how big? It's 49.8 percent of the total Federal assets. This is 9.5 times larger than the 5.3 percent for the Total Mortgages outstanding and 5.5 times the size of Taxes Receivable at 9.1 percent.

As the cost of a college education has skyrocketed and the college degree has lost its luster, becoming the white-collar equivalent of a high school diploma, a greater percentage of American youth are taking on over $100,000 worth of debt before they have any real-world work experience or any practical idea of how long it will take to pay that off.

Worse still, many are using that debt to get liberal arts degrees in fields that offer few new jobs and pay poorly, finding that they can make more money waiting tables (which they could have done four years prior to college, debt-free) than, say, teaching English.

Jill has been working with Advisor Perspectives since 2012 and in 2015 joined the dshort team as Research Director. She considers herself a Gen X’er and has a background in mathematics and science. She holds a Master of Science in Physical Science with a concentration in physics and astronomy from the University of Chicago. Jill spent a number of years working in both academia and nonprofits, from research in space science to playing a major role in a start-up science outreach organization.

After years in science, Jill shifted her focus to finance and economics. She is interested in economic trends and market reactions, and how domestic and international economies integrate, interact, and influence the world’s markets.

When not analyzing financial and economic data, Jill enjoys running, traveling, and cooking for family and friends.

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www.advisorperspectives.com