The Looming Student Loan Bubble

Almost half of all student borrowers were not making payments. 1 out of 4 in debt repayment past due on student debt.

from My Budget 360

The aggressive growth in student debt is setting the country up for another debt fueled bubble. Higher education costs have expanded so quickly that Americans now carry $1 trillion of student debt. Most of this expansion has occurred in a time when the return-on-investment for a college degree has fallen. Over the last ten years student debt outstanding has grown from less than $300 billion in 2002 to $1 trillion in 2012. The cracks in the student loan bubble are already forming with large numbers of students defaulting on their loans. And the pipeline is only increasing. Almost half of all student borrowers are not making payments. Many are in school and many are simply unable to pay. Yet with a weak economy the prospect increases that many younger Americans are going to enter a market where job growth is weak yet student debt payments are high.

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