Skip to comments.The student loan debt bomb (Now tops total credit card debt for the first time)
Posted on 12/10/2012 8:06:56 AM PST by SeekAndFind
Bill Bennett has an excellent column at CNN on the looming crisis of excess student debt:
Last week, the Federal Reserve Bank of New York reported that student loan debt increased to $956 billion, more than auto loan debt or credit card debt. More worrisome, student loan 90-day delinquency rate increased to 11% this past quarter and for the first time exceeds the "serious delinquency" rate for credit card debt.
Student loan debt is reaching bubble-bursting levels. By comparison, in October 2007, the start of the subprime mortgage crisis, 16% of subprime mortgages were 90 days delinquent, according to Federal Reserve Chairman Bernanke. By January 2008 it accelerated to 21%. If the economy heads off the fast-approaching fiscal cliff and tax rates spike for lower- and middle-class Americans, it may accelerate student loan defaults to crisis levels. The big banks got their taxpayer bailout; taxpayers may soon be on the hook for another.
Even if the markets manage to avoid another debt crisis, the mountain of student loan debt is already taking its toll on a weak economy.
Unlike credit card debt or automobile loans, student loans are virtually impossible to liquidate, even after declaring bankruptcy. So 20- and 30-year-olds buried under student loan debt are forced to put off other purchases crucial to the health of the economy, like buying a car or home or investing in the markets. Many are moving back in with their parents and delaying marriage and starting a family, two of the most vital building blocks to a healthy and prosperous economy. Valuable human capital is withering before it can even set its roots.
(Excerpt) Read more at americanthinker.com ...
We have all this college debt and yet Apple has to ship jobs over seas because they can not get qualified workers.
Guess all those Women Study’s degrees African-American Study degrees and Sports Communication degrees aren’t helping out so much!
And...surprise, surprise...Obama nationalized the student loan system a few years ago. Now, he and his party get to play banker and forgive loans in exchange for votes.
Who in their right mind would borrow money to go to college without the ability to immediately repay it in full?
Do any of these morons understand that the collateral used to secure the loan is their freedom, liberty, freedom of thought, and freedom to vote.
Slavery, pure and simple.
It seems like a scheme to help maintain high tuition and financing for left wing institutions of propaganda.
Unfortunately, I believe Republicans pressed for student loans to become undischargable under bankruptcy laws.
Yep. Part of the overall tightening of bankruptcy rules that was signed by George W. After an extended economic downturn you just KNEW that was coming back to bite the Pubbies.
I thought it was Clinton who did that.
Right. The solution to everyone’s problem is for young people to work their way through college.
Everybody wins in that scenario.
THEY get income and work experience.
THEY can graduate WITHOUT debt
THEY will have more maturity once they become students
It’s better all around and if you REALLY, REALlY want to have a four year long (or longer) frat house party and prolong your incubation period from childood to adult, OK... but you can do all THAT at your own expense!!
There is NO rush to get into and finish college in FOUR YEARS!
The schools ain’t going away and will let you in no matter how old you are or WHERE you got your money! :)
I got MY money in a factory working midnights... the school didn’t ask where I got it!
Many student loans would be incredibly bad risks if students could simply get an education, then go through the process of bankruptcy rather than pay for it.
In essence, you’d be changing it to a massive free gift program (while continuing to bid up the cost of a college education).
The proper response is to do nothing. Those who spent the money getting a degree with value (engineering etc) usually have no problem paying it back. Those who pissed it away (gender studies etc) will just have to do without stuff until they get it payed off.
Somebody benefits from this, or there wouldn’t be any student debt. Oh....the professors....the high priests of education. We have to revamp higher education and the professors aren’t going to like it. We are going to have to quit allowing instructors to claim to be researchers. They should write books on their own time.
In the name of Social Justice, leftest professors should provide their services for free, for the children.....
When will Obama forgive the debt and make the middle class pay the tab, it takes a village to socialize college education.