CNBC reports that "student debt obligations are growing faster than the average salaries for recent graduates, and require an estimated $160 billion in annual payments, according to new analysis from Moody's. That's $40 billion greater than Amazon's annual revenue, and is larger than the combined yearly sales of Home Depot and Lowe's."
The story goes on: "The velocity of growth tied to student loan debt is "staggering," having more than doubled from $580 million in 2008, Moody's said. That comes as the average salary for recent graduates has edged only slightly higher.
"Meanwhile, the largest holders of student loan debt are now Americans between ages 30 and 39, who have historically been the biggest spenders." And the Moody's report suggests that the only retailers that stand to benefit from this trend are stores that can credibly and consistently establish themselves as being discount-driven.
The story goes on: "The velocity of growth tied to student loan debt is "staggering," having more than doubled from $580 million in 2008, Moody's said. That comes as the average salary for recent graduates has edged only slightly higher.
"Meanwhile, the largest holders of student loan debt are now Americans between ages 30 and 39, who have historically been the biggest spenders." And the Moody's report suggests that the only retailers that stand to benefit from this trend are stores that can credibly and consistently establish themselves as being discount-driven.
- KC's View:
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Two things here.
One is that the story suggests that the only thing that may be able to derail this trend is some sort of government intervention. While I think the problem needs a systemic fix - it can't be just reducing the cost of college loans, for example, or just making community college free - I don't have a lot of confidence that the government we have or will have is going to be able to come up with a cohesive and competent approach to making college more affordable.
The other is that I'm not entirely sure that it will be just "discounters" who will do well in this environment. I think the better play is to be value-driven ... which is to say being conscious of cost, but also able to convey something aspirational. Because the thing about these people with student debt is that they went to college ...
