Part-time College: a Slow Path to Success

The first thing that came to mind while listening to a recent webcast about part-time students was, Wow, people like me who attended four-year colleges are clueless about how hard it is to be a part-time student!

My second thought was better summed up by one of the webcast’s panelists. Solving part-time students’ immense financial and logistical challenges “is really about economic and social mobility for a large group of citizens in our communities,” said Karen Stout, president of Achieving the Dream, a non-profit network of community colleges that promotes students’ success.

Four in 10 U.S. college students are part-time and about four in 10 part-time students drop out very early in their education, according to the Center for American Progress, which hosted the discussion and produced the video above.

The panelists – and two former part-time students who shared their experiences – described the high obstacles part-time students overcome to receive a two-year degree, or to move on to further educational programs.   To succeed, these students need financial support and an understanding of their particular needs: …Learn More

Many Americans Feel Financial Distress

The unemployment rate is an incredibly low 4.4 percent, and a Federal Reserve survey released last week shows that American households’ net worth is increasing.

Yet all is not well.

One in three Americans say they are suffering financial hardships, and another third report they are making it but aren’t exactly thriving. One in five struggles to cover what is most basic: food, housing and medical care. These new findings, which came out of a report by the federal Consumer Financial Protection Bureau (CFPB), aren’t about economists’ traditional, objective measures of security, income and wealth levels. This is about how people are feeling about their financial state of affairs.

Pie chart showing answers to a financial well-being test

The common, everyday financial distress expressed in the report is one marker of the familiar socioeconomic chasm that persists in this country. The CFPB highlights the most significant – and unsurprising – differences separating the secure from the struggling: education and income levels, the presence of health insurance, and how much of one’s budget is consumed by housing costs. “Access to jobs, benefits, sufficient income, and family resources likely play a major role in a person’s financial well-being,” the CFPB said.

But it’s also more complicated than that. For example, some lower-income people might, despite their challenges, be able to find their comfort level, CFPB said, while not all higher-income people do. One thing the survey can’t get at is the extent to which feelings of financial security or insecurity are being influenced by how Americans are doing relative to co-workers or people in their communities.

The agency used answers to its 2016 survey to assign financial well-being scores, ranging from 0 to 100, to nearly 6,400 participants. The findings are summarized in a new report.

Myriad factors influence how individuals feel, sometimes leading to surprising results in the CFPB report: …Learn More

Young and old women hugging

Outsized Caregiving Duties for the Few

The value of the informal care provided to the nation’s elderly, often by adult children, exceeds $500 billion a year – more than double the price tag for the formal care of nursing homes and home health aides.

Only 6 percent of Americans are, at any given time, regularly helping parents who have deteriorating health or disabilities to perform their routine daily activities (and 17 percent will provide this care sometime during their lifetime). But a sliver of the population shoulders an inordinate amount of responsibility.

A study by Gal Wettstein and Alice Zulkarnain of the Center for Retirement Research finds that the
6 percent of adults providing parental care devote an average 77 hours to their duties each month, or roughly the equivalent of a full-time job for two weeks.

And the burden grows as adult offspring get older.  They found that 12 percent of 70-year-olds are caring for parents and spend, on average, 95 hours per month doing so, even though they’ve reached an age when they might be developing health issues of their own.  This remarkable situation is no doubt a result of both rising life expectancies for the elderly parents and improving health among their offspring, who are also aging but are nevertheless still able to provide care.

The study was based on data from a survey of older Americans that used the standard definition of care, which includes helping seniors with activities of daily living (known as ADLs), such as bathing, eating, and walking across a room, and includes instrumental activities of daily living (IADLs), such as taking medications, cooking, and managing finances.

For the half of seniors over 85 who require this assistance, informal family care is their first choice. Not surprisingly, nearly two-thirds of this care is done by spouses and daughters, especially unmarried daughters. But there are costs, in terms of money and work, as well as time.  Caregivers report that they spend more than one-third of their budgets on parental care. …Learn More

Silhouette of white and black man

The U.S. Labor Participation Problem

The superlatives come fast and furious in the spate of reports coming out on the dwindling participation in the labor force by Americans still in their prime working years.

  • The fall in men’s participation in the United States has been going on for decades but has been steeper here than in all but two advanced economies (Israel and Italy) in recent years. “We have won the race to the bottom,” says Nicholas Eberstadt, an American Enterprise Institute scholar and author of “Men Without Work: America’s Invisible Crisis.”
  • A more recent drop in labor force participation for American women is “unique” – in the rest of the developed world, women’s participation continues to rise, according to a Brookings Institution report.
  • Men with no more than a high school degree make up 40 percent of workers but 60 percent of those who have dropped out of the U.S. labor force.
  • The decline in participation has been steepest among men without a high school education, particularly black men.

Economists count not only working people as being in the labor force but also people who are trying to find a job. Something is amiss when millions of Americans in their prime – between ages 25 and 54 – are doing neither, especially in a strong economy like the United States is experiencing now.

This issue is not new, but the election has brought it front and center. Also, the prolonged decline in men’s labor force participation had been partly masked by increasing women’s participation, which pulled up the aggregate figures. Now that women have begun withdrawing, the trend has become increasingly obvious – and ominous.

The Brookings and AEI scholars offer myriad, often overlapping, explanations for why this is happening: …Learn More

Women Spending Fewer Years in Marriage

It took months for one girlfriend’s suitor to persuade her to get married. Another of my friends skipped marriage entirely and had two children on her own. Others married, had kids, and divorced, a status that seems unlikely to change for some as they age.  I married for the first time at 56.

These anecdotes, about a random group of baby boomer women in the Boston area, illustrate some of the ways that women over the past half century have dramatically reduced the time they spend as part of a married couple.

middle boomer marriage decline chartA new study being released today by the Center for Retirement Research at Boston College finds that “middle boomer” women born in the late 1950s can expect to spend no more than half of their adult lives (starting at age 20) in marriage.  That share was closer to three-fourths for the mothers of baby boomers.

The researchers measured this dramatic change and its underlying causes – namely delayed wedlock, permanent singlehood, and divorce – across four cohorts of women who participated in a survey of older Americans.

Between the oldest group (born in 1931-41) and the youngest group (born in 1954-59), the average age of first marriage has increased by nearly three years, while the share of women who have never married tripled to 12 percent.  The share who’ve divorced also rose, from one-third to one half, according to the center, which sponsors this blog.

The change has been even starker for black women: the share of their adult lives spent in marriage declined from 54 percent of the oldest group to just 32 percent of middle boomers.  Divorce is a contributing factor, but the primary reason is that black women are much more likely to fall into the “not married” category than in the past.  In fact, the not married group is now larger than the married group.

This trend has many implications, not the least of which are financial. …
Learn More

Houses

Reverse Mortgage: Yes or No?

The older people who either consider a reverse mortgage or actually get one don’t have much else to fall back on.  Their primary assets – outside of their homes – are a car worth no more than $7,000 and about $2,000 in a checking account.

This was one salient fact unearthed about reverse mortgage users – or people who’ve looked into them – in a 2014-2015 survey led by Stephanie Moulton at Ohio State University. This supports a later study by Moulton that found that people who take out the loans tend to be in worse shape financially than other homeowners. The survey provides a more complete picture of who is turning to reverse mortgages – and why other people find alternatives to solve their financial issues.

Federally insured reverse mortgages, known as Home Equity Conversion Mortgages, or HECMs, allow homeowners over age 62 to borrow against their often-substantial home equity. These loans do not have to be paid back until the older homeowners sell the house or die.

Despite these attractive financial features, reverse mortgages are not popular: fewer than 60,000 were sold in 2015.  Many elderly homeowners are appropriately wary of a complex financial product. The fees and interest rates are also higher than on a standard mortgage.  But the idea behind HECMs is to allow cash-strapped seniors either to pay off their existing mortgages, eliminating house payments, or to create a readily accessible pool of cash or a new source of monthly income. Either way, they free up money that retirees can use to meet their expenses, emergencies, or medical bills.

The researchers interviewed some 1,800 older households after they had received the counseling required under federal law to apply for a HECM reverse mortgage.  About two-thirds of those counseled proceeded with the loans, and one-third decided against it. Here’s what these two groups look like: …Learn More

singing

A Day at the Golden Age Senior Center

Chung-Au Loi Tai

Boston – Four mornings a week, a van scoops up Chung-Au Loi Tai and delivers her to the senior center for a full schedule of activities. The 1:30 bingo game is her favorite.

She giggles when she explains why: she likes the Chinese Rice Biscuits that are handed out as prizes.

She is one of 350 mostly low-income clients of the Greater Boston Golden Age Center’s three locations around Boston. Most came to this country from China decades ago and raised families while working in Chinatown or the suburbs. Chung-Au, for example, worked in a shoe factory for nine years, and her late husband cooked in restaurants all over the city.

Now in old age, the Golden Age Center’s community of like-minded people spend their days learning English, new songs, and calligraphy, eating $2 lunches – a “suggested” donation – and getting help with their medical and other needs from the nurse and social workers on staff.

Finding things to do all day might seem trivial to working people – there are barely enough hours in a day. But the center’s carefully planned activities are critical to seniors’ physical and mental health and to their families, who are still out working. One big reason for these daily visits is to prevent the frail or cognitively impaired from becoming too isolated.

The Golden Age Center and similar centers around the country make up a patchwork of often poorly funded non-profit and local-government agencies that quietly fill a big need in the safety net for seniors. These agencies provide an array of services, including transportation, meals, exercise, medical supervision, and cognitive stimulation.  The federal Medicaid program pays the Golden Age Center a per-day fee for its low-income clients.

Ruth Moy, the executive director who founded the center in 1972, raises additional money from donations and other federal and local government programs.  “There is never enough money,” Moy said. “You just keep plugging away.” …Learn More

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