Keffer's Corner: Cars and College

The most impactful data I came across last week were the college debt numbers. Americans owe $1.3 trillion ($1,300,000,000,000) in college debt. That represents an increase of 300 percent in just the last decade. Thirty-five percent of this debt is held by people over 40 years old. Let’s use a popular word and call this a “bubble.” College lending, intended to aid and educate, is creating unintended consequences. If this were to be my shortest column ever, with just the above paragraph as a PSA, it would be worth sharing. There is little we can do for those holding the debt today. Some states – California, Connecticut, Iowa, Maine, North Dakota and Rhode Island – are creating refinancing programs. What we can do is be aware – as parents, or grandparents, who often help – and to coach our college intenders. Challenge their majors and what the job market offers for the degree. Share the simple but sobering truth of the matter about college repayment. In Florida, with transferable community college possibilities, discuss the economics of that possibility. Calculate the monthly payment after graduation, even if it is an estimate. Make it real. Most college kids have a vehicle of some description. They are accustomed to this convenience. At Wayne State University in Detroit, 98 percent of the 27,897 students drive to campus. That leads the nation. Most college kids have wheels because of their parents. After graduation, when insurance, fuel and repairs are on them, the cars can go away. The challenge of $300-a-month student loan payment trumps a car payment. They want money for an $80 concert ticket or to go to a friend’s wedding. Cars have become a casualty of this loan debt and their priorities. As with most things, there is a Page 2. Car purchases and age have a direct relationship. The biggest buyers of new vehicles are ages 35-65, by a wide margin over those younger and older. The sweet spot is 45-54 year olds, who edge out 35-44 and 55-64-year-olds. Most under 35 will fight through college debt, have families and begin buying new(er) cars. It is just a deferred process for many with college debt. The escalation of college debt needs to be reined in. There has to be a cost/benefit relationship to most economic actions. In this case, cost is trumping benefits in too many cases. Enough said. Pull out the sweaters for a couple months and try to enjoy our short Florida winter. Have a good week. Rick Keffer owns and operates Rick Keffer Dodge Chrysler Jeep in Yulee. He invites questions or positive stories about automobile use and ownership. rwkcar@aol.com  Courtesy News Leader
Categories: New Inventory

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