A new report from the New York Federal Reserve further confirms what many commentators have been long saying — student debt is the bubble that just keeps expanding. Total student debt has nearly tripled in the past three years.
Total student debt stands at $966 billion as of the end of 2012, with a 70 percent increase in both the number of borrowers and the average balance per person. The overall number of borrowers past due on their student loan payments has also grown, from under 10 percent in 2004 to 17 percent in 2012.Being debt to the government, student loans cannot be discharged in bankruptcy. Moreover, student debt is already having knock on effects as the new mortgage, cutting into home ownership.
AlterNet
Student Debt Tripled in Eight Years
Natasha Lennard | Salon
2 comments:
These 'loans' are now voluntary additional taxes to the borrowers...
Rsp
The next big short could be the collapse of the $1 trillion student loan bubble. Students are burdened with 3 and 4 times the debt they carried 10 to 20 years ago and when they graduate there are not enough jobs available, so the model is clearly broken and consequently tuitions will have to come down. Young parents with young children should look into higher education possibilities that are now emerging on the internet. Steve Forbes commented about a month ago on FOX business news that the same knowledge and information one acquires with a typical college education can be had for about $1,000 a year on the internet, Keep an eye on the rise of Virtual U.
I live in the Boston area so can you just imagine what happens to the local economy when Harvard, MIT, Tufts, North Eastern, BU, BC, and dozens of other schools are rendered obsolete? I wish I could buy put options on universities including my own alma mater, Boston College. I used to contribute to it until I realized that I was already contributing to BC through government subsidies, so why give twice? Maybe universities will go public and issue IPOs like the investment banks did. If so, I think it would confirm a top in tuition costs.
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