The first time I felt like an adult was when I owned a laptop. Sure, getting my first car was important, but something seemed so business-like about owning a laptop. It was meant to be used for serious stuff like writing papers and official emails, but it was instead used for downloading a Super Nintendo emulator and playing the video games of my childhood in a TOTALLY LEGAL MANNER. I didn’t spend my college years as productively as I should have, but universities and tech firms haven’t spent their time wisely either! This week in financial blunders, we examine the money troubles of colleges and a tech company as I grapple with my college choices.
Higher and Higher Education
It’s getting tougher to be a college student, according to a recent article from BuzzFeed Business, as student debt grew dramatically this past quarter. Student debt rose $31 billion this quarter up to $1.11 trillion, eclipsing other consumer debts like auto loans ($875 billion), credit card debt ($659 billion) and home equity debt ($226 billion). The Federal Reserve Bank of New York supplied all the data for the article, noting that almost 25% of all household debt seen in the last financial quarter of 2013 was from student debt. Student debt is also the hardest to pay back compared to the other types of debt, proven by growing 90-day delinquency rates in student loans. This is a bigger issue than just the obvious reasons when you consider the housing market: Students with debts are not buying homes any more. The study showed that post-recession individuals with student loan debt are not buying houses at the rate they were pre-recession, but researchers are not conclusively sure why that is happening.
Despite three profit warnings and big changeups last year, Sony is effectively no longer making profits until 2015 according to BBC News. Sony says it’s expected to lose $50 billion yen ($489 million U.S. dollars) in the coming financial year despite the release of the PlayStation 4. Sony’s TV and computer business saw some big problems in the past year. Sony bowed out of the computer business altogether, selling their Vaio brand to another firm. Their television sales have been suffering as well because of competition from winning rivals like Samsung. Other than the no-profits-until-next-year thing, here are some other negative things that are going on at Sony:
- Sony executives “are set to” forfeit their bonuses
- Overall, Sony lost $125 billion yen from March 2013–14
- Sony made 5,000 job cuts
- Sony’s TV unit lost over $700 billion yen in the past decade
Those are all the financial blunders we have for this week, but please comment below if you have more you’d like to talk about.