We’ve all learned that it pays to get an education. But maybe it does not pay as well as it once did. The number of people with a college diploma filing for bankruptcy has risen in the last five years by twenty percent, according to a new study. The research also shows boosts in age and earnings of filers.

Increase in graduate diploma bankruptcies

The report, released Tues by the Institute for Financial Literacy, showed that the quantity of bankruptcy filers with a graduate degree climbed from 11.2 percent in 2006 to 13.6 percent last year.

About 70 percent of filers are individuals that do not have a college diploma. But the study showed that those with associates and bachelor’s degrees also filed at a greater rate than in previous years. Those with just a high school education have a greater chance of filing. These people make up for about a third of all filings done.

Leslie Linfield is the Institute for Financial Literacy creator. She 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.“

More than 50,000 surveyed

The study was conducted from 2006 to 2010, involving more than 50,000 debtors in bankruptcy credit counseling or cash management courses. Its purpose was to track bankruptcy statistics following the 2005 Bankruptcy Abuse Prevention and Customer Protection Act. In order to control those who were able to file bankruptcy, the BAPCPA was signed by President 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. By 2010 that demographic had shifted to people between the ages of 45 and 54. 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 generating 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. Hispanic filers, according to the report, increased from 6.5 percent to 8.7 percent. There was a decrease from 2006 to 2010 in the quantity of African-Americans that filed as it went from 15.4 percent to 11.3 percent.

What can be blamed for the change?

Linfield explains that there is a cause of this massive increase in statistics. It is due to the job loss. The reasons cited by consumers were career loss, reduction of income and over-extended credit.

There was an increase in the amount of bankruptcies filed in America last year. They went up 1.5 million, the New York Daily News reports.

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